We often talk about the money management aspect of a trade. Naturally, we recommend using a 1:2 risk:reward ratio, which means to look for two pips of profit for every pip risked on a trade. But often the question of how big of a position to open and how many different trades one should have [...]
Many times I get asked by new traders how to handle a certain situation they find themselves in when trading. These traders may have opened five or six mini lots in a trade and have seen the market move in their direction. But now the market starts to move sideways or even move against them [...]
This week we are seeing some small reversals in some of the currency pairs, particularly the USD and JPY pairs. The main reason for this is the upcoming G7 meeting this weekend in Washington DC. This meeting is for the financial representatives of the largest economies in the world, the same countries whose currencies we [...]
Occasionally (hopefully not more than once) we find that we entered into the wrong side of a trade. We meant to sell, but instead we bought. After the few seconds of panic, we are left with a decision. What do we do now? Most professionals will tell you that whenever they find themselves in this [...]
Trading the financial markets is one of the most competitive fields in existence today. I recently received an email from an FX Power Course graduate who was doing all the things necessary to become a profitable trader. He was showing the right amount of patience in waiting for the solid setups. The risk:reward ratio used [...]
We often mention in the FX Power Courses that one of the key differences between a new trader and a professional trader is that new traders think about how much they can win while professional traders think about how much they can lose. It’s no coincidence that professional traders make money while many new traders [...]
After closing out a losing trade, it is human nature to want to get right back into another trade to get that money back. However, this is when many new traders can get themselves into trouble. One of the keys to long-term success is to show the patience and discipline necessary to wait for the [...]
Too many new traders spend time developing an approach to trading based on historical data and then when they use it live for the first time and lose, they throw it away thinking that it doesn’t work. The fact may be that the approach is solid, but it is our expectations that are not realistic. [...]
I’ve seen some new traders have some incredible winning results in a short period of time. However, quite often they will lose those gains as just quickly. They don’t do anything different and will come to us for some sort of insight. The reason is usually the same in that they forget to first identify [...]
After having identified your entry on a new trade, the next step should always be to identify the price level for your protective stop. The difference between the entry and the protective stop is your risk and represents what you are willing to lose on the trade. There is really only one guarantee in trading [...]