When it comes to Forex trading, risk management needs to be your #1 priority! Register for our weekly FREE webinars at http://www.PipsUniversity.com!
In the financial investment markets whether it be Stocks, Options, Forex, Commodities ETC… The number #1 thing every investor needs to learn and love, is proper risk management!
Risk management to most new traders usually goes in one ear and out the other. They soon realize how important it is when they lose a big chunk of their money or even worse blow out their account.
In a way we think this is healthy for investors as long as the amount of money they lose is small. Every single Forex trader that has lost a lot of money or even lost their account, get’s that feeling stuck in their head and it scares many investors to never do it again.
The reason why we think it is a good thing is because, it’s good to get that feeling into your head so that you know how awful it feels, so that in the future you do everything in your power to make it never happen again, it’s better to learn the feeling with a small amount than a big amount.
Many Foreign Exchange investors have never learned from a profession trading education provider to teach them how their risk should be calculated.
They learn from sources online that give them a certain amount of pips or money to lose per trade and then they tell them to cut their losses.
This is the worst advice you can ever hear or follow, every single stop loss is different, so this means every single position size is different!
You see your risk management is calculated by how far your stop loss is, now if you watched this training video you saw how we find our stop losses! It’s always at the previous high or low based on the trend that is happening!
For uptrends you will want to put your stop loss at the previous low & for downtrends you want to put it at the previous high.
Once you calculate your stop loss in pip form, then you can go to the position size calculator used in this video or any other that you want online!
We always punch in the size of the account, the base currency of the account, how many pips away our stop loss is, the currency pair traded & finally our risk % which is only 1-2% per trade!
The reason why you need to calculate your risk like this is because, until a previous high or low is broken, the trend is still valid, this is why you can’t do it based off what you think is right.
Price action in Forex is king and understanding how to do a correct stop loss, is how you will cut down on your random losses that were not needed when you understand how trends work.
It will also help you learn proper tactics to keep your account safe by only losing 1-2% per trade, which is absolutely crucial to learn!
It’s all about the process and not the profits, it’s just like working out, if you had correct form for the last 5 years and were consistently making muscle gains each month, by now you would look absolutely fantastic!
Forex trading is the exact same thing, learn that it is all about the process of making it a full time living and not the profits you can make overnight.
If you had a $100 trading account and thought 10% risk wasn’t a lot of money to lose per trade, this means that you can only lose 10 times in a row before losing all of your money.
If you only risk 2% that means you can lose 50 times in a row before losing all of your money, 1% would mean you can lose 100 times in a row before blowing out your account.
The odds of losing 100 times in a row for us at PipsUniversity.com are not likely! This is great for trading because, investing is all probabilities of profits and not a guarantee so we need to keep our capital safe and trade smart with a directional bias!
You can learn EXACTLY how we attack the Forex market with our trading strategies at
We are 100% verified by MyFxBook.com so you can see exactly how precise we are with our Foreign Exchange investing and how strict our risk management actually is!
Hopefully this training video helps all of you and that it makes you see the power of our education!
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