Escon deOjo's Forex

What will we need from a fx trading tutorial and other forex courses? Just like with the drivers, knowing how to operate the system is only a tiny part of our training. Risk management is what’s most sure to preclude us from finishing up in the ditch. Let us take an example. Around half of its trades are winners. It’s clear that this is a good system.

But if you start out thinking you have got a fifty percent chance of success so that you can risk half of your funds on each trade, you would be making an enormous mistake. 50% winners doesn’t mean that every loss will be followed by a win and vice versa. There could be 2, 3, 4, maybe on occasion even 10 losses in a row. Or you might have five losses followed by a win followed by another five losses. At ten percent the trader would probably still be wiped out sooner or later. You can check this out against back tests, but always double the worst situation that you see because it is almost certainly not the worst that might occur.

Money management is something that must be learned by any beginner trader.

This tip is probably the most valuable tip I can give. It’s all about psychology. You may think it’s not important, you may say give me a secret indicator that indicates trades with 100% certainty, but psychology place the major part in success of a trader.

Far too often traders let their emotions stand in the way. Risky trades, lust for fast profit, fear of losing it all, everything affects how successfully you trade. Traders aren’t robots and it’s our strength as well as a weakness. One one hand we can make intelligent decisions adapting to even the fastest changes in market, on the other hand our emotion is the greatest obstacle.

There’s only one solutions to this problem and it’s to develop a system. Create a strategy and follow it religiously. Only tweak it after you have the results not live trades. It may seem counterintuitive to leave a losing trade, but if your system requires to do so, do it. Then adjust. Granted you shouldn’t lose an account over that, but a good system wouldn’t allow that.

In any case, you have to cope with your emotions and become a robot when it comes to decision making.