This is one of probably the best tips anyone in Forex can give and that is that low risk trades increase profit and reduce loss. To many that are new to Forex this may be confusing as high risk has the potential to give greater reward, however it is this flaw that has the market going against you more than you win. Instead by do multiple low risk trades at different intervals the chance for success in most of your trades doubles to even tripling.
Above – When a trade goes against you, why not hold until the market move back. That can be done with low risk trading.. Sell at highs and buy at lows. Simple and low risk..
Low Risk Forex Trading
With this question i would first like to go back to when i first started trading, not knowing much about risk levels i soon lost more than $400 from my account. It made me wonder over and over what i was doing wrong, could it be my entry, could it be my exit, no it was neither of them, i studied the graphs and worked on theories and then all of a sudden the answer was staring me right in the face. Over 70% of my high risk trades would just touch my stop loss before going the way the market was heading, however all my low risk trades would stay in play because of the pip swing ratio and profit ratio. It then dawned on me, all my low risk trades would tap out in profit except for maybe less than 5%.
My Big Loss…
I quickly went over all the analysis of over 200 trades and the figures quickly added up.. I was not losing on low risk trades, i was only losing money on high risk trades. So after that it was a new beginning, I could of given up on Forex, i could of kept going down the same pattern and wipe out over $1000 or more, however what did instead is i changed to how the real FOREX market works, the no bullshit formula for success.
Buying Low And Selling High in Forex
By learning the buy and sell zones your profit potential will grow potentially in Forex..
My Big Wins Came Next.. My Forex Trades Success Rate Grew
What I next started doing was looking at highs of the day and then looking for entry’s for sells and then also looking for the lows of that day and then looking for buys for the day. It soon became clear than even if a trade was in profit i did not need to close it until it had made me over 25% gain per trade. After time i realized with this strategy i could be patient, trade within the buys and lows of the day and take profits with the most minimal risk. And here it is the figures of my results since the change. I now am on the way back to recovering nearly all my 400 dollar loss and am at a 80 to 85% success rate.
And here is the final and best part, by following this simple change and formula i was able to make money when the currency went against me while also when the currency goes your way. There is no need to close all trades daily or weekly, instead close them when they are in profit.
Please Note – My Forex Broker – Etoro has no rollover fees ( swap fees ) allowing me to trade for long periods of time with no cost at the rollover time. This is something everyone should consider of a broker when doing long trades.
Anyways that is my story on the subject of why one should do Low Risk Forex Trades instead or High Risk Trades and why it is more likely to win once you do. Let me know what you think and your opinion on the subject below.