We were chatting with some currency exchange traders about one of the Problems inspiring them while their trades were ongoing and found a standard issue – watching winning trades become losing trades.

As we’ve discussed before, if you are not handling your foreign exchange trades, from entry point to exit point, you are going to see this happen to you – and it’ll likely occur often .

Here’s the base of the issue :

A trade is entered along with a preliminary stop loss. What most traders do is try to get ALL their profit at once, but they don’t actually have a ‘target’ -

When the trade initially gets moneymaking, many traders will ’screengaze’ – they get targeted on how much they have made or are making at that moment. What they don’t do is plan for exiting the trade – they overstay in the trade and often watch their profits evaporate when the market turns against them ( and then compound that mistake by staying in EVEN LONGER to ‘get back’ those lose profits ). This is a losing offer in foreign exchange trading.

in short , they let greed make them lose sight of the point of the trade.

what’s the point of a trade? To maximize gain and minimize risk – it IS that easy.

Maximizing gain doesn’t mean you exit a trade at the comprehensive ‘Top’ – it means that for the duration the trade is on, you have a set of rules that establish where you may exit for profit – and it isn’t where you suspect it is! More on that in a bit

Minimizing risk means more than only setting that 1st stop loss – you MUST manage your stop losses throughout the period of a trade.

When currency exchange traders enter a trade they must protect their capital first and think profit 2nd. When their position starts trending up, they can take the right action to protect their capital AND their profits.

In fact, most successful currency exchange traders presume they’ll lose on each trade. They perform this psychological trick to make sure their risk plan is always top of mind! Once a trade turns in their favor ( much to their surprise ), the 1st steps they take is get themselves into a break-even trade situation ; followed by assertive stop loss management to maximize their profits on the trade.

They think risk first, profit 2nd.

Watch this video to see how it’s done :

http://www.yourforexangle.com/y/?i=1042601&u=4&l=f2

Our research and surveying has confirmed that too many new and inexperienced currency exchange traders simply do not understand how to manage risk in each trade – and all too often, the result is the same : they wipe out their accounts.

here is what we find is happening. Currency exchange has grown in appreciation so fast that many traders who are new to foreign exchange trading have just waded into the waters, opened an account and have begun putting on trades without any real thought or planning to how to approach trading.

It should be clear that the difficulty with this thinking is virtually no experience of how to approach trading foreign currencies and the significant risks to capital that it poses. All to frequently new traders try and trade first and learn 2nd.

And the results of that learning is the loss of their account balances. Hey, let’s be honest, trading on a demo account is never the same as trading with real money. You do not apply the same emotional control, the same trading beliefs or rules, you will take larger risks with the demo account and play too safe with the live account ( often to your own loss ).

Reverse your thinking : learn first, trade 2nd. Actually, across the board, the necessity to reverse folks’s mindsets about forex is what is needed. Learn the correct way to trade first, and THEN take that information to the market and trade with it.

as part of that learn first eventuality – the #1 element to trading foreign exchange that new, inexperienced or unsuccessful traders should learn is the simple way to MANAGE RISK first in each single trade.

Today, one of the most well regarded foreign exchange educators, Bill Poulos, released a video that teaches traders precisely how they need to be trading foreign exchange. And, how traders can put more trades in their favor by erasing risk – it’s totally cool thinking and it isn’t what’s being taught by the majority of the so-called ‘Gurus’ out there.

Catch the video here :

http://www.myforexdiscovery.com/y/?i=1042601&u=4&l=f2

By learning to manage risk FIRST, traders will find their trading transformed as they can approach foreign exchange trading with an entirely different attitude, a plan for erasing risk and a solid set of rules by which to trade.