We can learn a lot about how we should strategize in forex from basketball. In basketball if a player misses a shot, the team doesn't sit down, close their eyes and ears, while the other team is still playing; hoping that the game is going to come back in their favor. If a coach told you that was his strategy, you'd say that was ludicrous. Yet in forex a trader will put in a bad trade, turn off the computer, leaving the mistake to grow bigger, hoping that things will come back in his/her favor.
Good trading doesn't work like that, you have to practice good defense, you have to protect yourself!!
Everyday in forex you have an opponent and you must use your defense if you are going to be consistently profitable.
In basketball if your point guard has an injury that is keeping him from scoring, you cut that player and use the back-up point guard. In forex You must do the same thing. When your primary plan fails, you MUST cut that position and use a back-up plan..
Many times as traders we take a hit and quit. If you have a good strategy, you can keep playing until you are ahead of the game.
Two things you must remember to get into the big leagues. #1 CUT BAD TRADES QUICKLY #2 DON'T OVER-TRADE YOUR ACCOUNT. When I say don't over-trade, I mean if you have $1000.00 account don't trade a half of a lot.
If you have a $100.00 account and you trade 1 micro lot (.10) you can grow that by $5.00/day. Everyday that You reach your goal you can add 2 more pennies, which will give you an extra dollar everyday on 50pips. At that end of the 1st week, you will have $35.00, $75.00 the 2nd, and if you stop at that (.30), you can make an additional $150.00 for the month, for a total of $260.00 the 1st month; which is more than double what you started out with. The 2nd month you'd have $300.00, that is an additional $3560.00 for the year if you add .02/day to .10 and stopped at .30 and stayed there the rest of the trading year.
Remember forex is a get rich slow game, so don't over-trade your account.
Use discipline with a good strategy. Most importantly CUT BAD TRADES QUICKLY, because the best strategy in the world is no match for a free running loss!
NEVER LET THEM TRAP YOU!!!!!!!!!!!!!!!!!!
CUT BAD TRADES QUICKLY!!!!!!!!!!!!!!!!!
If you take a hit, don't sit down and quit hoping the other team is going to have mercy and let you win. They are your opponent, they are not your babysitters, they are out to beat you. You have to stay in the game, practice good defense, and protect yourself if you are going to come out ahead!!!!!
You can do this(^_^)!!!