| Traders in the forex market are now a savvy lot. | | | | but decent about his skills and his ability to make the |
| Almost everyone in the forex market nowadays are | | | | correct calls in the market. |
| self trained in reading charts, or a user of some form | | | | Being surprised, I asked him what was his profession |
| of high technology software to trade the forex | | | | before he became a professional trader and a trading |
| market. Some have graduated from using simple | | | | coach. His answer added to my surprise, because he |
| technical analysis to the new fangled sophistication of | | | | said, " I was a professional poker player and the |
| neural network forecasting and artificial intelligence. | | | | runner up in the Australian poker championship!". |
| But yet a great majority of these professed experts | | | | Therein lies his great success as a forex trader as |
| fail in their trading, losing money from their trading | | | | well, because as a poker player and a champion |
| rather than making profits. Why is it so? | | | | player at that, he was accustomed to taking |
| The answer lies in the devil within. The traders who | | | | calculated risks. |
| win are those who are capable of executing their | | | | The secret to trading his style was to take calculated |
| trading plans with discipline and precision, and more | | | | risks in his forex trading. |
| importantly, they can cope with the VOLATILITY of | | | | For example, if you have identified a trade, and you |
| forex trading. | | | | have placed a trade, do not place your stops too |
| Theory is if you can identify volatile movements, | | | | near the entry price because the odds favor the |
| even if they are small, and execute trades with | | | | stops being hit most of the time. |
| these volatile movements, buying on the lows and | | | | Rather, you can assess the odds and probability of |
| selling them at the peaks, you stand to make big | | | | the stops being hit before you place them. |
| profits. However, in practice, many volatile | | | | Again, when a trade presents itself, and you can |
| movements are too fast and tiny to be identified in | | | | compute that the odds of winning is in place rather |
| time to be traded profitably. Where larger volatile | | | | than losing, it is then that you can increase your |
| movements are identified, it is error in judgment and | | | | trades. |
| the speed of execution of the trades that reduce | | | | If you desire to win big, learn to compute the odds |
| the amount of profits. | | | | of winning, and like the successful poker player, bet |
| When I was conducting research into writing a report | | | | big when the odds are in your favor and stay away |
| on how a trader can recoup his losses after a | | | | from a trade where the odds indicate you will lose. |
| horrendous period of bad trading, I was pleasantly | | | | This is where forex traders will measure their |
| surprised by a veteran trader who told me he was a | | | | risk-reward ratios for their favorite trade setups and |
| profitable trader from day one of his starting trading. | | | | can identify which trade setup will result in bigger |
| This is by no means a false claim, because this | | | | profits and with lower risks. This is a skill that you |
| flamboyant trader has always been known both for | | | | ought to learn to become more profitable. |
| his tremendous skill in trading and for being anything | | | | |