Forex Trading Tips – 3 Simple Ones to Increase your Gains
Dramatically!
These tips don’t take long to do
and can be implemented in any forex trading strategy and they will cut risk and
increase profits so lets look at these 3 simple forex tips in more detail.
1) Cut Your Trading Frequency
Most traders simply trade too much
- they think the more they trade the more chance they will have of making
money. Others think if there not in the market they may miss a move and
finally, they try trading intra-day which is simply never gong to work.
In forex trading you don’t get
rewarded for how often you trade - you earn your money for being RIGHT – That’s
the only criteria to judge your trading performance on and most traders forget
this
Consider this:
Trading is a game of odds and the
really good risk/reward trades simply don’t come around that often and in forex
trading you should only concentrate on them.
To give you an example of how
powerful cutting your trading can - I know several traders who trade only a few
times a year and clear 100 – 200% in profits!
If you cut your trading frequency
down, you can then add in the next tip to make huge gains.
2) Risk More
You will hear a lot of Forex
traders tell you that you should risk no more than 2% per trade – RUBBISH!
If you are trading a small account
you will never make any money doing this.
Let’s say you are trading $10,000 -
2% is just $200!
Well, if you consider risk goes
with reward, you are not likely to make much risking that. Don’t forget the
fact you risk 2% on low odds trades, give you less chance of success than if
you risk 20% on a good high odds trade.
Many people think their taking low
risks - but in reality they are setting themselves up to lose longer term.
Risk is related to the odds not how
much you risk.
Keep in mind you are taking a
calculated risk at the right time and risking more, is simply the only way you
will win big. So how much should you risk of your account size? As rule of
thumb do 10 – 20% of your total account.
3) One At a Time
Diversification is another buzz
word that is supposed to restrict risk - but if you spread your trades around,
you simply dilute your profit potential. Don’t fall into this trap.Pick the
best trade you have and load it up with as much as you can afford and hit it hard.
BUT
You are probably thinking that the
above is not commonly accepted wisdom and that’s correct – but keep in mind the
majority make no real money, so being in the minority is no bad thing here!
Today, there are many who will tell
you that you can trade forex with low risk – no you can’t. If you restrict risk
to much you have no chance of winning. It’s an investment fact:The bigger the
risk the bigger the reward.
If you learn to take calculated risks when the odds are in
your favor you can pile up huge gains longer term and that’s what most people
want from forex trading.
Finally, the above is very time
effective: You are trading only great high odds trades so you are not trading
everyday or monitoring levels constantly 15 – 30 minutes are all you need to
build huge profits!