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These tips don’t take long to do and can be implemented in any forex trading strategy and they will cut risk and increase profits so lets look at these 3 simple forex tips in more detail.
Tip 1 Cut Your Trading Frequency
Most traders simply trade too much - they think the more they trade the more chance they will have of making money. Others think if there not in the market they may miss a move and finally, they try trading intra-day which is simply never gong to work.
In forex trading you don’t get rewarded for how often you trade - you earn your money for being RIGHT – That’s the only criteria to judge your trading performance on and most traders forget this
Trading is a game of odds and the really good risk/reward trades simply don’t come around that often and in forex trading you should only concentrate on them.
To give you an example of how powerful cutting your trading can - I know several traders who trade only a few times a year and clear 100 – 200% in profits! If you cut your trading frequency down, you can then add in the next tip to make huge gains.
Tip 2 Risk More
You will hear a lot of Forex traders tell you that you should risk no more than 2% per trade – RUBBISH! If you are trading a small account you will never make any money doing this.
Let’s say you are trading $10,000 - 2% is just $200!
Well, if you consider risk goes with reward, you are not likely to make much risking that. Don’t forget the fact you risk 2% on low odds trades, give you less chance of success than if you risk 20% on a good high odds trade.
Many people think their taking low risks - but in reality they are setting themselves up to lose longer term. Risk is related to the odds not how much you risk.
Keep in mind you are taking a calculated risk at the right time and risking more, is simply the only way you will win big. So how much should you risk of your account size? As rule of thumb do 10 – 20% of your total account.
Tip 3 One At a Time
Diversification is another buzz word that is supposed to restrict risk - but if you spread your trades around, you simply dilute your profit potential. Don’t fall into this trap.
Pick the best trade you have and load it up with as much as you can afford and hit it hard.
You are probably thinking that the above is not commonly accepted wisdom and that’s correct – but keep in mind the majority make no real money, so being in the minority is no bad thing here!
Today, there are many who will tell you that you can trade forex with low risk – no you can’t. If you restrict risk to much you have no chance of winning. It’s an investment fact:
The bigger the risk the bigger the reward.
If you learn to take calculated risks when the odds are in your favor you can pile up huge gains longer term and that’s what most people want from forex trading. Finally, the above is very time effective: You are trading only great high odds trades so you are not trading everyday or monitoring levels constantly 15 – 30 minutes are all you need to build huge profits!
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