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4/38
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1:1.5 Risk Management Strategy
Professional trading and risk management

Every day new Forex strategies appears, every day hundreds of people claims that they succeeded in the Forex because they make the holy strategy which can make millions of dollars and the strange thing that they want to sell it to you by 30-40 dollar, really if you search in the net about Forex strategies you will find tons of them but that’s not changing the fact that most traders lose their money in the market.
Why we lose in Forex:

  • Technical analysis is not enough :
You can read one or two books about technical analysis and then become good technical but you may read many books in technical, Japanese candles, divergence, Elliot, astrology and Gann, but you feel that you are not able to trade and if you open life account you lose all money very quickly.I mean by saying “technical analysis is not enough” that you may be wonderful technical but big Forex loser.
  • Fundamental analysis is not enough:

A lot of people knows a lot about countries finance and very careful to follow and predict the life news of counties markets, but really that’s not working because they ignore price levels and the ability for any cur…
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independeceday32 avatar

I totally agree with you, when one begins on forex most important is not to lose all the money in your trading account in the first three months, this risk management strategy  helps a lot !! good article !!

BilboFX avatar
BilboFX 16 May

Very good article and reminder about  the importance of money management, the first raison of a newbie complete loss of the account (I passed through this experience and learn it the hard way)

jezz avatar
jezz 16 May

As far as I know (and I don't know much) self discipline is the final holy grail. On the other hand, explaining to a complete bot not to risk more than 1, 2, 3, 4, 5% of the account means nothing. Why? All start accounts are up to 1000$, usually around 500$. So you tell me not to risk more than 5-20$ on my first trade ever? With 0,01mil in the game we talk about SL at 5 pips maybe, give or take a few. I simply think that risk to reward ratio doesn't apply to micro accounts which most beginners have. Self discipline and sticking to the strategy is the first step towards a good risk management

khalidamassi avatar

jezz,Thanks very much for your comment but in micro account every 10 pips (for EUR/USD) equal 1 $ ,so 1% risk of 1000 $ mean that you can make one micro trade with SL at 100 pips not 5 pips as you mentioned ... you enter with 5 micro trades with each 20 pips SL ...please take in your calculations." I simply think that risk to reward ratio doesn't apply to micro accounts " that's very bad thought because it will you off from the market sooner.

khalidamassi avatar

Jezz, I mean it will kick you off from market if you make risky trades and do not strict to reliable reward ratio.

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34/46
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Introduction From years of experience in Forex , I can memorize a lot of things which make us lose or completely exit the market due to incorrect actions or bad habits which is a result of some factors surrounds the Forex market... in this article I will show some problems which face me when i was a beginner before 8 years and how i overcome these problems which face us daily in the market . I took a lot of time to overcome these problems but if you read this carefully ,it will help you very much to get professional in the market.Preface At the beginning let's remember that Forex market is leveraged market and any incorrect trade (without stop loss) can blow out your account money... risk is from nature of Forex trading , if you do not feel in this market that you are in a battle , forgive me, short time and you will fail,Forex trading is not for you.In Forex you should use all your weapons to win the battle or at least not to exit the battle loser...we should prepare ourselves for the trading not only the strategy ... the strategy is important in trading but what about the human who uses this strategy. Is the human prepared for this ... below you will get prepared for fighting in …
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xtrader360 avatar
xtrader360 28 Apr.

good article +

merosalah avatar
merosalah 28 Apr.

good one, you great

hazem2013 avatar
hazem2013 29 Apr.

it desire + like

khalidamassi avatar

xtrader360, merosalah, hazem2013, thanks for reply

khalidamassi avatar

Thanks for everybody for support

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20/30
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1-Close stops.2-Enter only at the point of least risk.3-Study what the market pattern is telling you.4-Learn the habits of the traders who know what they are doing.5-Prepare before you sit down to trade.You have to understand that it does not matter what you think the market will do, it will not go anywhere unless there is an imbalance between the buyers and the sellers. One side needs to be winning for the market to trend.The other thing is that you can enter the market at anytime you get a signal that is valid. These signals appear 5 or 10 times a day.Novices never get to learn that the market is easy because they rush in without studying the market flow. Many just listen to brokers and they do not have on line data to see what the market is doing.You have to have the facilities of the professional trader to call yourself one. Most of all you have to act like one.The biggest common fault of losers is that they take a position and will not get out of it when the writing is on the wall that they were wrong. You will always know when you were right and you will always know that if you took a trade and it didn't do what you thought it would you are nowwrong. If it look like it is not…
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SpecialFX avatar
SpecialFX 23 Nov.

Mado, try to include a few images/charts in your future articles, because that way you could have more "quality" points :) Some good advice in this article though, especially the bit about traders not closing their losing positions, that is a big problem inexperienced traders face. Letting losses run and then quickly closing their profitable positions is a recipe for disaster.

doctortyby avatar
doctortyby 25 Nov.

By close stops, what range of pips do you mean?? Over the medium term and long term close stops are different on the spread of the price over the price action chart. Over the short term, intraday trading and scalping, close stops will take you out because of the noise in the markets.

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41/67
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This article is a follow up to the earlier article entitled:
 
10 Psychological Obstacles to Success
 
The aim of trading is to trade in a logical, predictable manner with the minimum of emotional conflict. In general, most traders battle with their emotions. Emotions are located in the unconscious part of the mind; to overcome emotions, people need to either use willpower, or to retrain their unconscious mind.
 
Willpower (or self discipline) sounds like the logical course of action and can be quite successful in the short term. It requires conscious effort though, and this can be draining. Also, if a trader trades because he thinks it is fun, then being disciplined takes away that fun. Using willpower alone is therefore an unsuccessful way of changing a trader’s behaviour.
 
Changing the unconscious mind so that the emotional drives change is harder but much more successful. It is a bit like changing the operating system on a computer; it is hard going but the computer works so much better afterwards.
 
The biggest obstacles to successful trading are desperation, the allure of “big money”, impatience, a failure to plan and a belief that the market is conspiring against you.
 
De…
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RobertBric avatar

My experience with people (I have a certificate in hypnotherapy) in general is that they will NOT seek the help of a psychotherapist (apart from smoking, losing weight and similar) because this kind of implies that something is wrong with them psychologically which is not something anyone wants to admit. So people struggle with their inner world in turmoil which turns their outer world into turmoil. Traders are people therefore we can expect a similar behaviour. Your offer of help is a nice gesture. I am interested in the response of the traders. Good on you.

CASPI avatar
CASPI 16 May

A good analysis. Good luck.

Mosomoso avatar
Mosomoso 17 May

Interesting, really interesting. Do you take clients over the phone? Is it possible to "train" someone in this way to trade successfully?

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39/67
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Why is it that so many traders are successful with their demo account but are consistent failures with their live account? The answer is that even though market is the same and their tools are the same, their psychological state is different. 
As a qualified Psychotherapist now in the FX market, I have spent time looking into the psychological aspects of trading and how traders react differently in the real world.
 The steps to successful trading are:
1        Learn how to manage data, use graphs and risk management.
2        Understand the fundamentals and technicals.
3        Identify a trading strategy that provides a consistent profit.
4        Apply the strategy consistently in a demo account.
5        Apply the strategy consistently in a live account. 
Once a trader has a strategy that works, he must practice it enough times that he commits the strategy to his unconscious mind. It is like learning to drive a car, after a while, people drive a car without thinking about it. Using a trading strategy must be like that; a trader should use the same winning strategy over and over with the minimum conscious intervention.
Where it most frequently goes wrong is in the transition from…
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RobertBric avatar

Some psychological problems stem from bad preparation but some are really deep and come with upbringing. I am looking forward to the next article where you will address solutions to the highlighted problems. Anyone who has ever trade a live account knows how much these problems can hit you. Traders who trade for a living…they need to be really tough.
There isn’t much training around on psychology for trading. Here is a business opportunity for you if you want to pursue it. All the very best.

doctortyby avatar

We cannot trade "emotional free" because we are human, and not robots. :) Fear and Greed are the greatest factors of Trading Psychology but there are many other causes for the "Market Sentiment", the Risk On and Risk Off sentiment for investors and retail traders. This is a great subject, and maybe, just maybe traders are pre-programed to fail and they have to fight with themselves to succeed in this business. Keep it up.+1

scramble avatar
scramble 11 May

i agree in many points, indeed well explained what a trader will encounter in his experience. will be interesting to know your point about possible ideas and possible solutions.
good luck

Mosomoso avatar
Mosomoso 17 May

Hi Gee, you talk about a trader needing to trade a system like he were driving a car (autopilot). I seem incapable of this. I can't get past the excitement of the trade/profit and the crash of the loss. How do you get past this? Secondly, you, and most others, suggest you "need" a strategy. I take a trade when I see one that looks good, there is no particular strategy involved. Is the idea of a strategy just a way of calming the mind in order to trade more succesfully, or is it actually necessary to progress and become a professional trader?

alifari avatar
alifari 19 May

The problem with amateur trader is they know their problems but fail to rectify their mistakes.

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5/58
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                                                                                                                 HOW TO LOVE YOUR LOSESIn this article we are going to discuss the psychology of the losing trades, and the tools and view I use to approach them. When we understand what a losing trade really is, you don't fear them anymore or don't try to avoid something that is unavoidable. That way you can LOVE YOUR LOSES.                                                   CHANGING THE DEFINITION OF A 'LOSS'The best way to fix the emotional pain when price stops us out is to look for the root of the problem, your mind. The information that the market reflects (upticks & downticks) is completely neutral, is no good or bad. Your approach must be the same with any kind of trade, winner or loser; try to think like the market perspective. Losing trades are the cost of doing business, that’s all, losing is part of the game and the key is how you lose.  Said this you can qualify losing trades in two categories, in reality you don’t need to care if a trade is a winner or a loser (is the same) there are two categories for any kind of trade, if the trade followed the rules of your trading plan o…
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TelisHellano avatar

Nice Article +1

positive avatar
positive 16 Feb.

emotion & loss - they go together. In trading it is indespensable to have control over both of them.Good stuff from your end. Keep them coming.+1

ritesh avatar
ritesh 26 Feb.

Losses are the business cost of doing forex trading. this is the best article +1

Bluedragon avatar
Bluedragon 29 Feb.

good luck +1 ;)

SoftControl avatar

THANK YOU VERY MUCH EVERYBODY !!! In special to Dukascopy Experts evaluation, they definitely know to appreciate the real good material. I shared my best experience in this trading years, in the hope that everyone can be a profitable trader !!

THANK YOU AGAIN !!

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