how to forex trading
Let us take for example a system with 96% win ratio with a Stop Loss of 1000 pips, a Profit Take of 15 pips, a lot size of one standard lot, and a maximum of only one trade open at a time. This gives you a net loss of $1,600. So in spite of having a win ratio of 96% you can still be in danger of a net loss. Furthermore, the higher the win ratio is the more risk there normally is in the strategy. So we will have to look wider for dependable guidelines to profit from these high risk – high profit systems. The first priority is to ensure that your account will be able to cater for the high draw downs and losses that can be expected. There are two ways to do this:But when you are reasonably safe from most foreseeable draw downs and losses you find that your return on investment ROI has dropped to a low percentage and the high %profits that you expected to make, requires too high an investment or otherwise very low profits per transaction. Suddenly you realize that with limited equity you can have the same ROI with a system with a much lower win ratio, but also has a much lower draw down and smaller Stop Losses, and therefore much less risk. So you must ask yourself the question, is it worth the stress and the danger of large draw downs and possible huge losses in order to make the same ROI that could be made with a much safer trading strategy?So – perhaps the rule of having a Stop Loss makes sense after all!In my next article I will continue to look at this issue and then propose a business and scientific way of approaching Forex trading that reduces risk to a minimum, but at the same time nearly guarantees a profitable outcome to Forex Trading. Hi,I am looking for a writer or team who are capable of writing unique articles on forex niche. I need 20 keep it in mind, this is going to be a long term project and this one is just a test is an advantage if you have experience trading Forex yourself.
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The market is riggedWhen too many bad trades are made, some traders often complain that the market is rigged or that the brokers are corrupt.
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You should learn about the various facts on how to account with the works of a Forex trader and the details that you should look for while comparing the traders.
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how to forex trading