As simplicity always works in my book of trading. It is forex u true that most traders over complicate things which in the end makes more losses than wins. Well, people tend to think that since trading is one of the hardest things to win at they tend to think that it must be sophisticated, when in reality it is very simple.
Well many of them have come to realize that it does not take smarts to win at trading. Rather, it takes sheer utmost discipline instead. And, it takes simplicity and a good trading system to succeed. This is why I want to go over the most important thing first before we get into the system itself. Can you guess what that is? First rule of thumb is: Do NOT Over Trade!
Over trading comes in a few different forms, and one of the most common mistakes that traders make is leveraging their account too high by either trading too many times in any one trading session, or by trading too much of their account at one time. Leverage Is A Double Edged Sword! 5,000 in his or her account should be able to trade 15 to 18 lots. However, most traders analyze the charts correctly and place sensible trades for the most part, but yet they tend to over leverage themselves. As a consequence of this, they are often forced to exit a trade position at the wrong time or become too emotionally charged to be in a constructive frame of mind to trade profitably. If you are a scalper kind of trader, then you should only look to do 3 trades maximum. 1 trade a day but NO MORE than 2 trade setups each day in each session.
NEW traders no matter how much Education you may have under your belt, or when learning a new trading system such as this one. What lot size can we trade? A lot of traders really stumble to figure this out properly, I’m not perfect! I too had great difficulties to try and figure this out properly and to try and explain it is not easy! Let’s Do The Math Traders Let’s say you’re a Intra-day Trader and you want to use a 1 to 1 win loss ratio? So on 8 of the trades we win 800 pips then on 2 of the trades we lose 200 pips. You see, in reality, you made 800 pips but you lost 200 of those 800 so what are we left with?