“… There’s a way to know exactly when to exit and how much you’re willing to accept. More importantly, the [market] can gap as much as it wants, but you’d lose only the predetermined amount you decided upon when you entered the position.”- Jim Augustine (square brackets mine)
It’s been decided that I’d report my trading results on monthly basis, especially the trading results from the strategies I use to give my trading signals. These trading strategies are used on the accounts made accessible to my clients who see how I open trades and manage them, and thus trade accordingly. The trading results from my weekly trading update wouldn’t be included because I’ve already made references to them in my articles.
The USDCAD Hedging strategy account grew by 1.6% last month. You know how much this would be if you were managing millions of dollars. This strategy, which is non-directional and suitable for passive investors, ensures that profits are made regardless of market directions. The USDCAD is a slow pair which mayn’t experience upwards or downwards moves of up to 150 pips for many weeks in a year. This characteristic allows very slow but steady growth on my account on annual basis.
The Gap Trading strategy has been modified to give more and better trading signals (this modification would be explained in a future article). The strategy account grew by 3.2% last month, excluding open profits. This 3.2% increase resulted from around 640-pip gain since I use 0.01 lots for each $2000 in the account. If this risk was increased fourfold, the account would’ve grown by 12.8%. But this kind of risk is too high for me. I’m a funds manager, not a gambler: little drops of water make a mighty ocean
If one uses high risk, one might see one’s trading account sailing thru the air in one period. The next period the account would be plummeting to the ground. Behold the trader (using high risk) that suffers heavy losses with the most hyped and the supposedly best strategy in the world! Behold the trader (using low risk) that survives and makes profit with a terrible system!
This issue of risk management bears repetition. It’s true that there’s no such thing as risk-free trading, and that’s why the risk MUST be managed. Always put capital preservation, not profits, first
In 2008, Dr. Van Tharp declared in an interview that, with a terrible system, you still have the chance to meet your objectives through position sizing. When you have a superb system but don’t understand position sizing, you probably won’t meet your objectives. Picking the right entry prices has nothing to do with trading success and neither do amazing trading systems with high percentage wins. It’s evident that if traders would be more interested in sound position sizing techniques that work, the experience of many traders would change for the better. Doing so, you can escape many trading woes and anxieties that majority of traders suffer today.
Satisfaction outweighs the sacrifice when attempts are made to apply sound risk management.
You may consider signing up for my trading signals services and see how I survive the markets uncertainties and move ahead gradually, and do so along with me. You can do that here: http://www.fxinstructor.com/en/analytics/ituglobal
Also, the team at Fxinstructor.com now concentrates their efforts on helping traders make progress to the greatest extent possible. There are immense benefits in taking advantage of their services. You’d be glad you do so.
NB: Please watch out for my coming articles with these titles: ‘Resist the Lure of High Risk – Part 3’ ‘Is There Really the Best Time to Trade?’ ‘Carrying Out Stealth Raids in Weak and Strong Markets,’ ‘Worst-case Scenarios’, ‘Effective Swing Trading in Forex’, ‘Advanced Gap Trading’, ‘3 Recent Gap Trades,’ ‘Trading for a Livelihood,’ ‘If I Were a Trading Neophyte…,’ ‘Developing the Right Attitude towards Losses (Part 2),’ ‘The True Holy Grail,’ ‘Achieve Success through Sensible Risk-to-reward Ratio (An Interview with A trading Enthusiast),’ ‘Monthly Trading Report (June 2011),’ etc.
This report is ended with more quotes from Dr. Mircea Dologa:
1. “Even if you’re a lucky fellow, and have discovered either by your own study or thru mentorship, the most consistent and symbiotic trading technique, there remains the problem of assimilating and practicing it.”
2. “A professional traders has a few emotions. Many readers would be surprised to hear this, but we’ll mention the word ‘confidence’… and they’ll understand it rather quickly. Nothing can be done without it. No trader will use a trading strategy without having a full confidence in its efficiency. But it’s hard work to acquire confidence. It takes many months, even years to get acquainted with the optimal tools that you’ve tested and which are prone to give the best trading results. Confidence is a rare friend that once acquired, will assist the trader day-after-day.”
3. “You attitude is based on the confidence that you have in your store of experience. Keep in mind that slumps and joys are two indispensable emotions in trading process. Being under pressure shouldn’t change this attitude. At the end, there’ll always be a new day and the sun will rise again. But keep one thing in mind: preserve your capital by holding to the rules concerning the ‘tiny bits’ stop losses.”
Your questions and opinions are highly welcome.
With best regards,
Forex Signals Strategist, Funds Manager &Coach
Yahoo! Messenger ID: saazalmu
Get my Forex trading signals at: http://www.fxinstructor.com/en/analytics/ituglobal
And my past articles are also available at: www.ituglobalforex.blogspot.com
NB: There is risk of loss in trading, but it is possible to be a successful trader.
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