Hey traders… how is it going?
There are two possible things that we need to analyze when testing one system:
- Accuracy of the system
- The risk reward ratio
A lot of traders “try” to focus on the accuracy of the system. I get a bunch of emails asking me about how many times my system is right, etc.
forex, GBPCAD, ratio, reward, risk, signal
Yesterday I was doing a lie webinar at FxStreet and one of the assistants reminded me of something, which could be the essence of trading, he said something like this:
Trading is about finding the right opportunity, with the lowest amount of risk.
He is totally right!
About Risk and Trade Opportunities
We have hundreds of currency pairs, thousands of opportunities each day. So our job as traders is to fin the right one or the right ones to trade each day.
Now, we need to understand something though.
There will alway be risk. It is something we need to live with as traders. There is no such thing as a risk free trade.
So embrace risk, learn to live with it… I guarantee that once you feel comfortable with it, comfortable about the fact that each trade has the possibility to go against you, you ‘ll begin to see more and clearer trade opportunities. As I said, I guarantee it.
GBPUSD Analysis, opportunities, risk
Having an objective and sound system is very important to our success in the Forex market, but it isnt as important as other aspects of trading such as trade, capital and risk management. See why on this forex video.
Feel free to comment.
capital management, forex video, risk
Should I move my stop loss or just leave it where I initially placed it? This is the dilemma. While we are on a trade and the market moves on our favor, this question always arises.
And let me tell you something, there is no right or wrong answer, but the way we approach the market will tell us which one is better for each one of us.
To find the answer to this question, I want you to imagine these scenarios:
- You open a trade, the market moves on your favor, you decide to move your stop loss level, the market reverses and hits your new stop loss level and it continues against you, this is, if you didn’t move your stop loss level, the market
risk, stop loss, trade management