With my little experience in the CURRENCY market, I've come to this realization that;
(1) If your trading strategy is 90% accurate you can still be loosing money (If GOOD RRR IS NOT APPLIED, at least 3:1)
(2 ) If you are winning 8 trades out of 10 you can still be loosing money (IF YOUR EMOTION IS PUSHING YOU TO CLOSE YOUR PROFIT WITHOUT ALLOWING IT TO HIT PROFIT TARGET AND ALLOWING YOUR LOSS TRADES TO HIT STOP LOSS WITH THE HOPE THAT MARKET WILL TURN BACK AND GO IN YOUR FAVOUR. In simple english, your profit is small while your loss is huge.
You are closing $5 in 8 trades out of 10 trades while you are loosing just two trades and it results to - $30 each (mathematically, 8trades won= 8x5= $40 and two trade lost 2x$30= $60 (this is minus $20).In conclusion, you are winning 8 trades out of 10 trades and you are still loosing😐
(3) Even if you have precise entry and exit you can still be loosing money (THAT IS,IF YOUR POSITION SIZE IS NOT DEFINED) e.g. you opened a trade with 0.01 lot size with precise entry and exit, boom you won it, $10 dropped wow, you opened another trade with the same 0.01 lot size,boom you won it, another $10 dropped,chai. IT SEEMS FOREX IS MY WAY, I AM GOING TO MAKE IT, GOD HAS OPENED WAY FOR ME, YOU WILL SEE UPDATE LIKE; FUCK HATERS, WE ARE MAKING IT, DM FOR SIGNAL SERVICES AND TRADE ANALYSIS🤣🤣they will post there profit and trade history to lure novice 😹...
THAT EGO WILL CREEP IN AND SINCE THEIR STRATEGY IS WORKING AND THEY HAVE PRECISE ENTRY AND EXIT, they open another trade this time with 0.04 lot size, boom,he won it, $40 dropped (today total profit $20+$20+$40= +$80. Wow WONDERFUL), the following day he opened another trade with same 0.04 lot size but now in 5 places😹, chai, he saw news that IRAN FIRED MISSILE TARGETING LOS ANGELES,LOTS OF CASUALTIES WERE RECORDED, CHAI,USD DROPPED 😹😹
ALL THE 5 OPENED POSITION WITH 0.04 lot size each resulted to loss (minus $40x5= - $200) 😳😳😳. Equity $0.0000, this time, update will change and they will be like: ANYBODY HAVE AN IDEA OF A BROKER OFFERING NO DEPOSIT BONUS TO TRADE 😹😹😹...BACK TO SQUARE ONE, I CALL THIS VICIOUS CIRCLE. (THE MESSAGE IS WISE UP,THE MARKET IS NOT ANYBODY PROPERTY,ANYTHING CAN CHANGE IN A MATTER OF MINUTES,EVEN SECONDS) 😊
If you don't manage your portfolio properly,NO MATTER HOW SMART YOU ARE YOU WILL EVENTUALLY RUN OUT OF EQUITY.
Don't be deceived as there is no god in the market there will always be red trades as we are trading on script BUT THE GOAL is to HAVE ABOUT 80 to 90% with strict risk management ( script= past transactions by smart money.)
There several ways of managing risk
(1) Through your Lot size
(2) By having knowledge of how to place stop loss properly(some people just choose a random number of pips as SL value 😑🤡)
(3) Through leverage
(4) By understanding your broker
(5) By using a good risk reward ratio (RRR)
(6) Through portfolio diversification with good knowledge of currency correlation (BASKET TRADING)
