Forex Trading Secrets: Forex trading has been one of the best kept secrets of the high net worth investor for decades until recently. There are limitless profits available in the FX market for those with the right information and the willingness to act on that information.
But the very nature of the Forex market requires one party in every trade to be right and the other wrong. In essence, the winner’s winnings are the loser’s losses. As it is a well know fact that 92% of people who have a go at trading, fail – it is in both the sophisticated investor and the bank’s interests to keep their ‘edge’ in the market closely guarded.
Here are some closely guarded Forex trading secrets that big investors and banks did not want you to learn.
Forex trading involves a high level of risk. You may have noticed that many brokers and forex trading servicess are beleaguered with such disclaimers. However, as a forex trader you can limit the amount of risk per trade thanks to trade sizing. We do not recommend ever risking more than 1% of your account per trade. So if you have an account of $1000, do not risk more than $10 per trade. If you have an account of $100, 000 – do not risk more than $1000 per trade, and so forth.
We also recommend trading only if you have a good percentage reward for every trade. This is known as a reward/risk ratio. The reward/risk ratio we adhere to is 3:1. If the trade (based on your strategy) looks like it could yield a 3% reward then we will take it (risking 1%). But if it does not – we leave it and walk away.
Another forex trading secret that big investors did not want you to learn is that advances in technology have made it possible for private investors from all walks of life to trade from the comfort of their own home. Far gone are the days where forex trading was simply the preserve of the elite ‘old school boys network’ in magic circle investment banks.
Profitable forex strategies are available to such private investors for them to use at their disposal, making it possible for potentially anyone to make money providing forex – providing they can follow a simply set of rules and are able to leave their ego at the front door and be coached by a forex mentor or trader coach.
After all, to be successful at anything requires coaching and time. A lot of forex newbies simply do not accept this in their search for the holy grail.