You know it is amazing how much we can all learn from each other. Now that I am back with the group full time many of you have been able to begin catching up with me and joining me in moving forward. Ajay who started with the group back in I believe 2008 and is now trading forex full timeshared a few insights with me.

“One thing I would recommend to your new traders is to learn money management. Leverage can help you make money, but over leverage can really ruin you. Looks at MF Global. Try to hit singles, not home runs. Take small profit & don’t get upset if the trade moves away from you. As this market gives plenty of opportunities to trade..”

I am going to follow up with an article outlining the importance of money management to a traders success. The most important thing ever trader has learned from me is how to manage risk correctly. Almost every trader I know had blown up an account prior to joining.

Money Management

New traders often wonder if they are reading the positions sizes wrong. “Let me understand this right. 0.02% seems such a small amount.”

Does this sound familiar. Taking on a trade that if stopped out risks 3% of your account balance? Now what happens after you take ten losing trades in a row. Do you know that you now need to have about a 50% return in order just to be back to break even?

Many, many novice traders will take a position with 100% of their available balance. They sometimes have 20-30% gains on one trade but eventually always wipe out their account.

Instead a professional trader will take that single trade you risked 3% on and have the risk be somewhere around 0.35 – 0.5%. Even more, as we teach in the Conquer V2 that single will be broken up into three pieces, all different sizes. Now, add trades on six currency pairs and you have diversified and managed your risk like a professional.

This is not how a professional trader trades. A series of losses can be a blow to me mentally but never my account. Also through the approach taught with the Conquer V2 trading system I am systemically able to take double and even triple digit gains from the market yearly. Sure I could up my margin and trade size for bigger gains but that means then taking larger draw downs and that is not something I desire.

On a side note it is also always nice to be affirmed. We must give in order to receive. A simple comment like this can really change your whole day:

“Thanks a lot. I will write a testimonial for you. You have changed my whole trading career…….”

Taking time to say thank you is important. I wish to thank all of you because each of you has helped me become a better person, trader, and friend.