Trading Secrets Revealed!
When it comes to FOREX trading we know that nothing works 100% of the time right. What I’ll share with you is that there’re five (5) things that will always present itself every time you look at a chart or even consider opening a trade.
These simple but powerful facts are the key differentiator between Winners and Losers. If you truly want to reap success from trading, we must be able to take these into consideration every time you execute a trade.
In fact, I would suggest that you write these 5 facts of trading down and make sure it’s very visible whenever you’re in the market. Regardless of the strategy you trade, whether you trade breakouts, pullbacks, trends, structures or even pure support and resistance, you cannot make money unless you take these 5 facts into consideration. If you’re a day trader, swing trader, or scalper the same rules are applied.
Most traders try to get the perfect entries and exits for each trade as we think this is how we’re going to be successful. I often hear, “oh I just need to get a better entry” or another popular phrase “my account is too small, if I had a bigger account then I’d make more money.” None of these will matter unless we identify, learn and effectively practice the proper usage of these five (5) facts that I’ll share with you.
Without proper planning and execution of these facts, your account will never see consistent gains and you will continuously be frustrated with trading and eventually join the long listed of people that quit trading FOREX.
To reiterate these are very simple yet powerful facts that many of us have never even thought about them until now. When we look at the forex market, only these 5 things are FACTS and absolutely certain with your trading results.
We can WIN a lot of money
We can WIN a small amount of money
We can LOSE a lot of money
We can LOSE a small amount of money
We can neither WIN nor LOSE any money
These are the only known FACTS on the outcome of any FOREX trade. We are however in a position where only two of these known facts are in our power to control and that’s how much we LOSE. If we are able to eliminate Large Losses from the possible outcomes, then we have a 80% chance of making money. While we are not certain on the outcome of every trade, what we do know is that if all small loss = small wins then they both cancel each other. A trade that neither win nor lose is a break even and it doesn’t affect my account, therefore I’m only left with Wins of a lot of money. This is where we make our profits.
You may ask, how do you get to the big wins and eliminate the big losses?
My answer would be simple, ensure that all your position sizes are the same regardless of the trade. Use one constant whenever you’re trading, for eg; risk will always be 1% of my account or a 1.00 lotsize.
Set a Max for your Stoploss, meaning none of your trades can exceed 80pips. So we are sure we cannot lose nothing over 80pips.
Another tip is to ensure that your trades have a minimum of 1:2 (Risk:Reward) ratio. Always take partial profits at 1:1 risk and allow the trade to run risk free.
All these should be pre established based on your trading strategy and risk management guidelines.
Finally, document your progress everyday you trade for twenty one (21) trading days and you are guarantee to see true results and improvement throughout your entire trading journey. Apply these simple facts with your trading strategy and smile as you watch your account grow.
I hope you have found this message impacting and helpful, we’ll talk again soon in our next blog post.
Trade Coach/ Mentor
Wave FX Academy