 Forex Trading Signal Service
Let’s say you intend to use 5,000 dollars as your starting capital to trade the Forex market. (Before I proceed further, what do you think with that amount of money, should you open a mini or a standard account?) Although per pip for a standard lot cost 10 dollars if you were to trade GBPUSD currency pair, but that doesn’t mean that you can open a standard account with 5,000 dollars. So my recommendation is to open a mini account with per pip cost at 1 dollar. Before deciding how much you want to risk per trade, you should start with how much you are willing to lose per month, so to withstand any possible drawdown. Since we are starting with only 5,000 dollars as capital, I would suggest a maximum cap as high as 10% risk per month, which is 500 dollars. So now we know that we can only trade with 500 dollars a month* even though we have 5,000 as capital. The next step is to determine your risk per trade. Once we know that we can only risk 500 dollars in a month, and then you can decide how much you prefer to risk per trade. To simplify calculation, let's say we decide to set the risk per trade at 5% of 500 dollars, so that means in a mini account, 25 dollars is equivalent to 25 pips. Once you have decided that this would be your money management, the next is to look out for trade setup not risking more than 25 pips, and only if both conditions agree, then you enter the trade. So using this money management, you are actually risking only 0.5% of your trading capital on a single trade. In all, a trader should possess three important elements in order to trade profitably. That is you need to adopt a disciplined mindset, developed a proper money management and together with a good trading system, you should be able to trade with confidence and see your trading account grow. *This money management means that in order to wipe out the trading account, you have to lose ten consecutive months of trading to burn that entire 5,000 dollars. Is that possible? Yes, if you don’t have a proven trading system. If you have a good trading system (you may want to consider using my trading system) and with proper money management, it is less likely that you have such a disastrous run.  FX Operator now supports RSS syndication in HTML format. Please click here to subscribe with Feedburner and receive all new articles and analysis via email. If you prefer not to have feedburner feeds, you may also subscribe FX Operator RSS.
Risk DisclosureTrading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Hypothetical Performance ResultsHypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. Trading StrategiesIt should not be assumed that the methods, techniques, or indicators presented in these website will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by the registered users are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of FX Operator (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on the website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment. |
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