One beginner takes a course in driving before he ever gets inside the car. But the other beginner jumps straight in the automobile with no tuition, heads for the first road that he sees and ends up either in the wrong town or even more likely, in the ditch. And remember, that was the same car. In the same way we are able to take the same forex system, give it to 3 different traders, and see three different results. So what do we need from a fx trading tutorial and other currency exchange courses? Just like with the drivers, knowing how to operate the system is only a tiny part of our coaching.
Let us take an example. Around 50% of its trades are winners. It’s clear that this is a good system. It should make profits in the long term. There might be two, three, 4, maybe on occasion even 10 losses in a row. Or you may have 5 losses followed by a win followed by another five losses. Later on naturally, it might even up and you would have a run where there were more wins; but if you were placing 50% or maybe twenty percent of your account balance on each trade, you would be wiped out long before the wins started coming in. A better risk in that circumstance would be 5% or maybe 2%. At 10% the trader would probably still be wiped out sooner or later. You can check this out against back tests, but always double the worst situation that you see as it is almost definitely not the worst that could happen.
Money management is something that needs to be learned by any amateur trader. You can see from this article why it’s really important to take a fx trading tutorial of some type prior to starting trading.
