The Sneaky Way To Managing Losses In Your Forex Trading

One of the cardinal rules of Forex trading is to keep your losses small. With small Forex trading losses, you can outlast those times the market moves against you, and be well positioned for when the trend turns around. The proven method to keeping your losses small is to set your maximum loss before you even open a Forex trading position. The maximum loss is the greatest amount of capital that you are comfortable losing on any one trade. With your maximum loss set as a small percentage of your Forex trading float, a string of losses won’t stop you from trading. Unlike the 95% of Forex traders out there who lose money because they haven’t applied good money management rules to their Forex trading system, you will be far down the road to success with this money management rule.

What happens if you don’t set a maximum loss? Let’s look at an example. If I had a Forex trading float of $1000, and I began trading with $100 a trade, it would be reasonable to experience three losses in a row. This would reduce my Forex trading capital to $700. What do you think those 95% of traders say at this time? They would reason, “Well, I’ve already had three losses in a row. So I’m really due for a win now.”

They would decide they’re going to bet $300 on the next trade because they think they have a higher chance of winning.

If that trader did bet $300 dollars on the next trade because they thought they were going to win, their capital could be reduced to $400 dollars. Their chances of making money now are very slim. They would need to make 150% on their next trade just to break even. If they had set their maximum loss, and stuck to that decision, they would not be in this position.

Here’s a perfect illustration why most people lose money in the Forex trading market. Let’s start out with another $1,000 float, and begin our Forex trading with $250. After only three losses in a row, we’ve lost $750, and our capital has been reduced to $250. Effectively, we must make 300% return on the next trade and that will allow us to break even.

In both of these cases, the reason for failure was because the trader risked too much, and didn’t apply good money management. Remember, the goal here is to keep our losses as small as possible while also making sure that we open a large enough position to capitalize on profits. With your money management rules in place, in your Forex trading system, you will always be able to do this.

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New Forum to Provide Currency Traders with a Unique Opportunity to Learn from Professional Forex Trading Experts

New Zealand (PRWEB) (PRWEB) September 29, 2005 -- Foreign exchange trading website Go Forex has launched an interactive forum designed to provide new and experienced currency traders with an opportunity to seek free and professional advice from a panel of forex trading experts.

Users will be able to log in and submit their questions on forex related topics in one of four separate forums to four resident experts. The forums cover beginners' forex questions, money management and trading psychology, technical analysis and fundamental analysis.

The experts come from a wide range of backgrounds each with their own particular expertise in a certain aspect of forex trading. Dirk du Toit, Steve Pickering, Abe Cofnas and Duane Archer will provide free and professional forex advice on the forums.

Mr du Toit, also known as DrForex by the vibrant online forex trading community, stresses the need for a strong foundation before entering the foreign exchange market. "If you start FX wrong – you're gone, if you start right – you might. With proper guidance your chance to succeed escalates exponentially."

The foreign exchange market has seen a large increase in turnover in recent years, partly attributable to an increase in interest in foreign exchange as an asset class, with daily turnover now averaging US$1.9 trillion daily according to the Bank for International Settlements. Steve Pickering, forex trading mentor and resident expert on the forum has experienced this increase in activity levels first hand. “In my 34-year career in the forex market, I have never seen so many people being attracted to the market as now.”

Registration for the forum is free and open to all.

For additional information on this press release, please contact Steven Moxham or visit the forum at http://www.goforex.net/forum

About Go Forex:
Go Forex provides an introduction to foreign exchange trading and showcases a wide range of services available to forex traders. Visitors will find news, articles, free charts, live rates, and a multitude of forex related services on the site.

Contact:
Steven Moxham, Site Owner
Go Forex

Heads up Guys, Last Male Bastion under Siege - We believe that Women are set to step out from the shadows and earn the Lion’s share of profit. Why? Be

(PRWEB) September 9, 2005 -- Well, I can hear the rumblings already - this is certainly going to throw the 'cat amongst the pigeons' and make me very unpopular with the men, but what the heck - I believe what I say, and I say what I believe. I'm a modern man. I'm in touch with my feminine side.

Heads up guys, the truth is staring you in the face.

FACT: Women are more thrifty than men.

Guys, could you manage to feed the family and buy new shoes each week on the house keeping money?

FACT: Women are more systematic and organized than men.

Observe your 'better half' in the kitchen or cleaning the house. She will have a routine for everything and God help anyone who disrupts it.

FACT: Women follow instruction (strategies and systems) far more diligently than men..

.. and are far less emotional in doing so! Did I say less emotional? OK, maybe that is stretching the point a bit, but the good news is that PMT could soon be standing for a 'Perfect Month's Trading'

FACT: Women have a built in advantage over men in that they nurture by nature.

What? Well, look at it this way - when you look back at your life how many times do you kick yourself and think:-

"If only I had stuck with that and had not become impatient; I would be set up for life right now"

Women have the natural ability to nurture from conception through to conclusion routinely, calmly and with care. Following things through to a successful conclusion is an attribute of all successful traders and it comes naturally to woman.

Now I am not saying that men cannot become great traders as most great traders are men, but trading should be a walk in the park for most women if only they knew it.

Head Trader
Forex-Uncovered.com

Example of a Profitable Transaction in FOREX Trading

To make a profit, in the FOREX, a trader can enter the market as a *buy position* (known as going "long") or a *sell position*(known as going "short").

For discussion, let's assume you've been studying the EURO.

Your trading methods, rules, strategies, etc., tell you that prices will rise during a particular timeframe. So you buy the EUR/USD pair (or, technically, you will simultaneously buy euros, the base currency, and sell dollars).

You open up your handy trading station software (provided to you for free by the online broker), which resides on your desktop, and you see that the EUR/USD pair is trading at:

<<>>

REMEMBER: the quote to the left of the / (1.3242) refers to the bid or "sell" price (what you obtain in USD when you sell EUR). The quote to the right of the / (1.3245) is used to obtain the ask or "buy" price (what you have to pay in USD if you buy EUR).

So, since you believe that the market price for the EUR/USD pair will go higher, you will enter a *buy position* in the market. For simplicities sake, let's say you bought one lot at 1.3245. As long as you sell back the pair at a higher price, then you make money.

But, no worries. This seemingly elaborate process is handled, and even calculated for you, via the broker's software mentioned above. The chart software and the quote board are in agreement with all sides of the currencies.

To illustrate a typical FX SELL trade, consider this scenario involving the USD/JPY currency pair:

REMEMBER ~ Selling ("going short") the currency pair implies selling the first, base currency, and buying the second, quote currency. You sell the currency pair if you believe the base currency (USD) will go down relative to the quote currency (JPY), or equivalently, that the quote currency (JPY) will go up relative to the base currency (USD).

NOTE: while the Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you've never been in the FOREX market before, trust us when we say, "this process is nearly seamless through your broker trade station (software). We're just showing you this thought-process below so you can SEE how a PROFIT occurs even when

SELLING a currency pair.

The current bid/ask price for USD/JPY is 105.26/105.30, meaning you can buy $1 US for 105.30 Japanese YEN or sell $1 US for 105.26 YEN.

Suppose you decide that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise.

So you make the trade: selling US $100,000 and purchasing 10,526,000 YEN. (Remember, at 1% margin, your initial margin deposit would be $1,000.)

As you expected, USD/JPY falls to 104.26/104.30, meaning you can now buy $1 US for $104.30 Japanese YEN or sell $1 US for 104.26

Since you're short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit.

You buy US $100,000 at the current USD/JPY rate of 104.30, and receive 10,430,000 YEN. Since you originally bought(paid for) 10,526,000 YEN, your profit is 96,000 YEN.

To calculate your P&L in terms of US dollars, simply divide 96,000 by the current USD/JPY rate of 104.30.

Total profit = US $920.42

Never a Bear Market in FOREX

There is never a Bear Market in FOREX.

You can have access to a seamless, mutually-inclusive (two-
way) exchange of currencies. Meaning, because currencies
trade in "pairs" (for example, US dollar vs. yen or US
dollar vs. Swiss franc), one side of every currency pair
(for example, USD/JPY - JPY = YEN) is constantly moving in
relation to the other. Thus, when you buy a particular
currency, you are actually simultaneously selling the other
currency in that particular pair. As the market moves, one
of the currencies will increase in value versus the other.
Of course, it is up to you to choose the correct currency to
be long or short. Since currency trading always involves
buying one currency and selling another, there is no
structural bias to the market. This means you have equal
potential to profit in both a rising or falling market.

Why Trade Forex?

Here's the HIGHLIGHTS on WHY FOREX is becoming the
go-to market for private and institutional traders alike:


The Main Benefits of Trading the FX Spot Market:



- Never a 'Bear' Market!

- No Separate commissions!

- Low to Zero Transaction Costs / Narrow Dealer Spreads!

- A 24-hour Market with Superior Market Liquidity!

- It has up to 200:1 Leverage for Margin Trading!

- Streaming Executable Prices!

- Price Movements Are Highly Predictable!

- FOREX Trading is Economical and Start-up Costs are Low!