Forex always referred to as the WORLD LARGEST CASINO! Risk management
is extremely important because of the following reasons:1. It's involve a lot of leverage, it can up-to 100:1, 200:1.
2. It's need to adhere to the trading principle, many people get blown out because they don't understand leverage & do not follow their trading principle.
3. You can get rich fast, also lose it fast!
4. The speed of execution & liquidity induces gambling.
To be able to become extremely success in Trading, prepare yourself:
1. Set a goal.
2. Use every trading session as a learning experience, learn from failure..
3. Acting your trading principle & strategy in disciplined way.
4. Don't let emotionally decide your trading way.
There are so much more factors we need to practice & caution on trading such a high liquidity Market.
For me, continue to follow through strategy, learn from expert, read more news & forum, practice..practice & continue practice..
Ultimately, the believe in Trading toward my GOAL of FINANCIAL FREEDOM.
3 comments:
How does the leverage work? Lets say 100:1 Vs 200:1.
Personally, I think goal setting is not a practical way. The reason is trader has to be objective. Setting a goal will impart decision making such as quit timing and traded size.
Thanks for the comment. I personally has another opinion. My view of goal setting is reference & guideline of each trading. Of course we don'r want to lost more gain opportunity, so I normally will practice trailing stop loss to reduce my risk & get more gain.Goal to me is the amount of trade I must do per week, the amount of money I want to earn per week..that's are guideline..
Let say if you open a standard lot account 100k units per lot, allowed 100:1 leverage, it means you need at least $1000 as your margin. if 200:1,at least $500 as your margin.
For instance, you long EUR/USD, & gain profit of 25pips.then,
0.0025 X 100,000 = 250
your leverage 100:1 will have Leverage ratio of 0.01
Profit = 250 x 0.01 = $2.50
your leverage 200:1 will have leverage ratio : 0.005
Profit = 250 x 0.01=$1.25
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