Tutorial Forex

Do you want to know the simple steps that all professional Forex Traders abide too, then keep reading.

If you are struggling to make some extra bucks through trading then you have landed at the right place. You see some years ago I was just like you may be right now. I was at my ends wit as I could not put the pieces together.

If you are in the same dilemma and struggling with your trading there may be one crucial thing that you are missing or ignoring. This is without any doubt your Money management rules. You will me stunned to see what proper Money management can do to your account.

Quite surprisingly, being a good trader doesn’t require having an awesome system that wins 95% of the time. A lot of new traders get caught up in the hype of the amount of money they can make and forget about the proper trading size they should use per trade. This major mistake causes a lot of traders to blow their whole account in a matter of days. Simply because they ignored the Money Management rule.

Money management is in other words the back bone of your trading. Having well thought rules and sticking to them will help you stay in the FX arena for longer. Bear in mind that trading is to some extent a game of probability, a reason why to have a good money management rule in place.

To make things easier, I have outlined those critical Money Management rules below.

* Risk only 2% of your total account size per day

* Trade with less than 1/10th of your account size. This is a critical rule for staying in the forex game long enough to succeed.

* Always use a stop loss that is decent enough so as not to get thrown out of the market to later see price heading in the initial direction you picked.

* Take partial profit when you’ve reached an area of support/resistance and bring your Stop Loss to Break-Even. (This has saved me many losing trades).

However simple those rules are, those new to trading always tend to forget about them. Applying those rules accordingly will without any doubt minimize the risk and alternatively help you stay in the game long enough to profit from the market.

The table below will help you have a clearer idea of lots sizes:

1 Lot = 100.000 Units of a currency. Pip value = 10 Dollar

0.1 Lot = 10.000 Units of a currency. Pip value = 1 Dollar

0.01 Lot = 1.000 Units of a currency. Pip value = 0.1 Dollar

Thus, having an account size of $10000 and risking only 2% per day implies that you are ready to lose $200 on any given day. Depending on the amount of pip you are risking you will pick the appropriate lot size.

For more information on how to become a super successful Forex trader, read my full review of Top Dog Trading and Forex Mentor and obtain your copy of FREE Forex Video Courses.