Cut Your Losses Short And Let Your Profit Run

Many of us have this saying that cut your loss short and let your profits run. We all know that most traders in Forex lose their money because they set their stop-loss way too big. If you want to make money, you have to set your stop-loss close to your opening price so that you will not lose your investment if the market is going in your favor. You will still have time and money to close your accounts and when they heard this saying, they only know that they need to set their stop-loss close. They do not understand setting the stop-loss too close to your opening g price in the market may cost your profits. If you have traded in Forex, you will see that there are no fixed patterns. The trends are changing, the patterns are changing and the only way to save your profit from the volatility of the market is by setting your stop-loss suitably. Many traders set unrealistic and big stop-loss and by the time they close their trades, they have lost all of their money. When they try to make their profit, they keep their trades open on the market for all the time and they also lost their money. This article will tell you how to trade in Forex markets to save your money and to keep your stop-losses working in your trades.

Hard fact

Majority of the traders don’t understand that they are having more winning trades but why they are still losing money. This is due to their negative risk-reward ratio. If you look at the professional traders in Australia then you will be stunned to see their high-risk-reward ratios. They are always looking for 1:2 or better risk-reward ratio to execute their trade. If you can follow this simple principle then making money, in the long run, will not be a hard fact for you. Those who are completely new to this market might not understand the importance of high-risk-reward ratio. In such case, we highly recommended the novice traders to demo trade the market for the first six months.

Changing your life is not all easy. But if you can master CFD trading then it’s just a matter of time to secure your financial freedom. Never think that you will not be able to become a profitable trader. Always trade this market with a positive attitude and everything will be in order. Focus on the market trend and trade with strict discipline.

Stop-losses should be placed in a standard position

Do not place your stop-loss top close to your accounts. Cutting you loses short does not say that you have to close the trades even in normal volatility. The market is always going volatile and you have to understand this volatility that can be in your favor to profit making. When you place your stop-loss too close to your accounts, the trades close because the volatility is going on. You also cannot place these trades too far away from your opening price as they will cost you money. You will be losing your money and before you understand what has been done, you will have lost your investment. The best way to cut your losses short is by placing the stop-loss in a standard position. It should not be too big or too small but in a good position to make you lose short.

Letting your profits run

When traders let their profit run, they want to make lots of money in their one trade. It is not right and you should not do these trades. You have to set your target of how much money you want to make. If you can make this amount by knowing the trend will be in your favor, you can let your profits run. Do not be greedy and close trades when you have made your profits.

Leave a Reply