News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
You Can't Lose Taking Profits....or Can You?

You Can't Lose Taking Profits....or Can You?

Thomas Long, Course Instructor

A common statement in the trading world is, “Ringing the cash register is not a bad thing”.  This means getting out of a trade when it is showing a profit is a winning strategy.  If that is the case, then how come we see many new traders winning most of their trades and still losing money? 

It is more common than you might think.  The problem of course is money management.  This is what makes professional traders consistently profitable. 

They call it working a trade and it means having the patience and discipline not to take quick profits on a trade as soon as the market starts moving against your position.  We would all love to enter into a trade, have about 60 seconds of anxiety and then just pure joy as the market keeps moving in our direction into big profits without a worry.  Unfortunately, that is not real trading.  Real trading involves planning your trade before you enter and then trading you plan.  We need to think about using at least a 1:2 risk:reward ratio every time we are in a trade.  If we risk 50 pips, we need to look for at least 100 pips in profit.  That way if we win half of our trades, we are profitable. 

Sound easy?  It is probably the most difficult key to successful trading and takes practice and confidence.  But this is what trading is all about.   

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES