zedanzz
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is the risk control is very important ??
we always warn the novices not to risk too much , and you will read this in every article you read and lestin to it from every trader you meet , but as a forex trader you shoudn't go on before you ask very important question ?! WHY ??
why shouldn't i risk too mush ! specially when iam in front of a very good trade which i have a very high probabilty in my favor , also specialy if you had losing streak before this trade and you are about to take you money back ! shouldn't I double my risk ?! how !!
i will not talk about the despline and the plan which must be followed because ofcourse you heard about them and you will read the same words in every article but i will tell you why you shouldn't increase your risk .
first i want to tell you that only big loss will hurt you , big loss can push you in the dark area and the lack of clear vision which will cause you to lose your confedence which is a very important element in trading .
to save your money from this problem you have the key ! never change your risk percentage , i will tell you why and how here ?!
how ?
by remembering one of the most important rules in trading which is { every thing can happen }
this is true ! you can not know what is going to happen and more important you don't need to know in order to make money , all you can do and you should is to know what is happening in front of you and you go with it , don't expect because you will lose . so always remember this { you just need to defend your money }
you must know that being successful trader means to survive as long as you can , the successful trader is not the one who always win ! he is the one who are able to continue after losing a trade ! .
why :
i will give you an example here :
let's assume that we have tow traders { A } & { B }
and i gave them the same amount of money 100 $ , and with the trader A i told him not to put on any trade with more than 2 % of the capital i gave to him .
the trader B refused this 2 % , he decided to risk 10 % of the money .
they put on the same trades , after 10 trades which were the first six trades were losing trades .
trader A :
he put on 10 trades , with the first 6 trades are losing trades and the next 4 are succssful trades . 6 x 2 % = 12 % > 12 $
4 x 2 % = 8 % > 8 $
tottal loss is > 4 $ only .
let's see trader B .. he put on the same trades but with more risk percentage .
6 x 10 = 60 $
4 x 10 = 40 $
tottal loss 20 $ which is 20 % of his capital in just 10 trades !!
what is important here is , we may take loss in the begining and this is not the problem , the problem is to never lose our money so fast in order to take the chance to get your money back again . if you blew up your account so fast you will put your self in the dark area and you may not be able to come back again !
never try to beat the market , don't try to fight back , market is unbeatable , all you can do is to defend your money , try to save it as long as you can , and you will find your money increases with the time , in the example imagine trader A who lost just 4 % of his money ! he will never give up and trader B is trying to get his money back from the market which means that he started a war he can't win .
trader A is in a comfort zone ! trader B is in the lack of pain and stress , he let his emotions enter the game , and you shouldnt let this happen .
so what ever happens never risk more than what your plan gives you to risk , don't expect the market to do something even if the odds are high and in your favour .
try to survive as long as you can and success will follow .
#rules_of_successful_trading .
we always warn the novices not to risk too much , and you will read this in every article you read and lestin to it from every trader you meet , but as a forex trader you shoudn't go on before you ask very important question ?! WHY ??
why shouldn't i risk too mush ! specially when iam in front of a very good trade which i have a very high probabilty in my favor , also specialy if you had losing streak before this trade and you are about to take you money back ! shouldn't I double my risk ?! how !!
i will not talk about the despline and the plan which must be followed because ofcourse you heard about them and you will read the same words in every article but i will tell you why you shouldn't increase your risk .
first i want to tell you that only big loss will hurt you , big loss can push you in the dark area and the lack of clear vision which will cause you to lose your confedence which is a very important element in trading .
to save your money from this problem you have the key ! never change your risk percentage , i will tell you why and how here ?!
how ?
by remembering one of the most important rules in trading which is { every thing can happen }
this is true ! you can not know what is going to happen and more important you don't need to know in order to make money , all you can do and you should is to know what is happening in front of you and you go with it , don't expect because you will lose . so always remember this { you just need to defend your money }
you must know that being successful trader means to survive as long as you can , the successful trader is not the one who always win ! he is the one who are able to continue after losing a trade ! .
why :
i will give you an example here :
let's assume that we have tow traders { A } & { B }
and i gave them the same amount of money 100 $ , and with the trader A i told him not to put on any trade with more than 2 % of the capital i gave to him .
the trader B refused this 2 % , he decided to risk 10 % of the money .
they put on the same trades , after 10 trades which were the first six trades were losing trades .
trader A :
he put on 10 trades , with the first 6 trades are losing trades and the next 4 are succssful trades . 6 x 2 % = 12 % > 12 $
4 x 2 % = 8 % > 8 $
tottal loss is > 4 $ only .
let's see trader B .. he put on the same trades but with more risk percentage .
6 x 10 = 60 $
4 x 10 = 40 $
tottal loss 20 $ which is 20 % of his capital in just 10 trades !!
what is important here is , we may take loss in the begining and this is not the problem , the problem is to never lose our money so fast in order to take the chance to get your money back again . if you blew up your account so fast you will put your self in the dark area and you may not be able to come back again !
never try to beat the market , don't try to fight back , market is unbeatable , all you can do is to defend your money , try to save it as long as you can , and you will find your money increases with the time , in the example imagine trader A who lost just 4 % of his money ! he will never give up and trader B is trying to get his money back from the market which means that he started a war he can't win .
trader A is in a comfort zone ! trader B is in the lack of pain and stress , he let his emotions enter the game , and you shouldnt let this happen .
so what ever happens never risk more than what your plan gives you to risk , don't expect the market to do something even if the odds are high and in your favour .
try to survive as long as you can and success will follow .
#rules_of_successful_trading .
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