Two Timeless Rules in FOREX Investing
RULE #1) ~ Cut your losers; let your winners ride.
One important thing that every new trader must know before
entering this highly profitable business is that life is not
perfect, even in FOREX land, and you should always know one
fact: YOU WILL HAVE LOSING TRADES.
Every FOREX trader does. The key to being a consistent,
predictable, reliable trader is to, at the end of the day, add
up more wins than losses. And, when you KNOW(based off your
trading rules), without a doubt, that YES, indeed you are, in a
losing trade, don't keep losing money (lowering your stop loss)
just to *prove you are right* or your rules are wrong (however
you want to look at it).
All traders have to face it - you can't turn a donkey into a
ferrari. You can't change the strips of a zebra and you can't
turn chicken poop into chicken salad. The best trades are
usually "right" immediately (the techniques, rules, methods and
strategies you can learn in my website will be your best
indicator for just what a "right" trade really is).
Remember, people have been trading the markets for a hundred and
sixty years. The smart traders know there's going to be another
trade. Cut your loses short and compound those winning positions.
RULE #2) ~ Thou Shall Not Trade the FOREX Without Placing a Stop
Loss Order.
When you place a STOP order, right along with your ENTRY order,
via your online trade station, you've just automatically
prevented a potential loss from "running" too far.
Before initiating any trade, if you haven't already figured out
at what point you would be wrong and would want to cut your
loses or, at the very least, reevaluate your position from the
sidelines, then you shouldn't be putting on the trade in the
first place.
Show me a FOREX trader who doesn't use stop loss orders and I'll
show you someone who loses a lot of money.