It is like a hitter who has racked up two strikes – next time he will focus on hitting the ball, slowing the spin, and trying to beat it.Īlways calculate the risk of your operations. If my following two trades are winners, then I go back to the usual number of contracts. Why keep losing trading five contracts when you could save a lot of money by reducing your position to a single agreement on the next trade? If I make two losing trades in a row, I permanently reduce the size of my positions to a single contract. Next, you will see in more detail what I mean:Īlways reduce the size of your positions when you are trading poorly.Įvery good trader follows this rule. If you see that the market is skyrocketing, has been up for a long time, and is very close to its exhaustion point, it is time to make the decision to invest down or against the trend. Therefore, as important as investing with the trend knows how to determine the right time to stop doing it this is a rule that professional traders understand perfectly. Every trend has a point of exhaustion, which means that it will end at some point. I want to make an extraordinary wake-up call in this regard. Indeed, you have already seen many videos in which they always recommend you to invest with the trend. The good news is that this is a realistic goal, but only if you fully meet three fundamental standards. Typically, newcomers to trading dream of achieving financial independence, quitting their job, and earning enough income to transform their life. It often happens that after having several failed trades, beginner and not-so-beginner traders abandon or renounce investments because by not following any rule to avoid losing money in forex, those negative experiences seriously affect their psychology.
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