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Limiting Trading Losses

It is simply not possible for any trader--whether amateur, professional or anywhere in between--to avoid every single loss. The disciplined trader is fully cognizant of the inevitability of losing hard-earned profits and, as such, is able to accept losses without emotional upheaval. At the same time, however, there are systematic methods by which you can ensure that losses are kept to a minimum.

The System

Every trader should employ a loss-limit system whereby he or she limits losses to a fixed percentage of assets, or a fixed percentage loss from capital employed in a single trade. Think of such a system as a circuit breaker, or collar, on the trade. After a certain percentage has been lost from his or her trading account or principal traded, the trader may very well stop trading entirely or may immediately exit the losing position. With this system, exiting a losing position is a single, unemotional decision that is not affected by any hopes that "the market is sure to turn around any minute now."

A 2% Limit of Loss

A common level of acceptable loss for one's trading account is 2% of equity in the trading account. The capital in your trading account is your risk capital, the capital that you employ (that you risk) on a day-to-day basis to try to garner profits for your enterprise.

The loss-limit system can even be implemented before entering a trade. When  you are deciding how ..

Read the Full Story

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No Market Holiday!

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In this Issue...


  • Get up to date - Breaking News  

  • Read what our Top Contributors are saying 

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    Forex Market Outlook 11/25/11

     

    I hope everyone here in the US had a great Thanksgiving yesterday, though the same can't be said for the markets.  We are still in risk aversion mode as the Euro debt crisis continues to plague the global economy so the US dollar has been the favored investment vehicle of choice.

     

    Today is a shortened session here in the US with the stock market open for a half-day session.  There is likely to be little action for stocks so the correlative effects of market movements will be minimal.  However, it must be noted that with decreased volume there is sometimes increased volatility.

     

    While there is no news due out for the US session, a quick recap of this morning's news shows that confidence figures in the Euro zone came in worse than expected.  While this is not surprising, yesterday's reports of German GDP and confidence figures were positive.  GDP in Germany was 2.5% YoY, as expected.  IFO confidence figures all cam e in better than expected which shows that Germany is still moving along, despite the bond auction disaster from earlier this week,

     

    In the UK, GDP figures also came in as expected, showing .5% growth which is not a great figure.  It is for this reason that the BOE has been ultra-accommodative despite the high inflation they are experiencing. 

     

    Also in the Euro zone, Portugal had their credit rating reduced to junk status, and they have been all but an afterthought as the markets have focused on the Spanish banks and Italy's government debt.

     

    The picture continues to worsen in the Euro zone and the push for a Euro bond is picking up traction, for those who still want to see the Euro succeed.  As this situation drags out, the global economy will continue to suffer and a solution will not be forthcoming overnight.

     

    But we are seeing a bit of a morning bounce here as perhaps some of the selling was overblown.  Risk still remains at heightened levels so I'm going to continue with the short-term trading themes until more clarity emerges.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

      

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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    WSSFX.com : SELL GBPUSD @1.5462

    Dear FX Trader,

    We have just opened a trade at 2011.11.25 13:00:01 (GMT)
    *** SELL GBPUSD @1.5462 ***
    *** Stop Loss @ 1.5601 ***
    *** Take Profit @ 0.0000 ***


    Always late to follow our signal?
    You can buy our Robot/Expert Advisor at
    http://forexwinningsolution.com


    What time on my country?
    Here some major cities time:
    - New York, United States : 2011.11.25 08:00:01
    - London, United Kingdom : 2011.11.25 14:00:01
    - Munich, Germany : 2011.11.25 15:00:01
    - Dubai, Uni Emirat Arab : 2011.11.25 17:00:01
    - Jakarta, Indonesia : 2011.11.25 20:00:01
    - Kuala Lumpur, Malaysia : 2011.11.25 21:00:01
    - Hongkong, China : 2011.11.25 21:00:01
    - Tokyo, Japan : 2011.11.25 22:00:01
    - Sydney, Australia : 2011.11.26 00:00:01

    More time information : http://wwp.greenwichmeantime.com

    How to define Lot Size?
    We prefer use 10% balance. Example:
    If balance $1000, trade 0.1 lot


    What strategy we use?
    We are using Reversal Strategy with Dynamic TP and SL (Max 139 pips)
    You can buy our Robot/Expert Advisor at
    http://forexwinningsolution.com


    Good Luck and Have a nice pips!!


    WSSFX Trader Team
    http://wssfx.com

    Follow our signal on Twitter and Facebook:
    - http://twitter.com/wssfx
    - http://www.facebook.com/pages/WSSFXcom/125825584126616

    Recommended Expert Advisor
    - GOLD TRADER : http://forexgoldtrader.com
    - GBPUSD TRADER : http://forexwinningsolution.com


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    Group: http://groups.google.com/group/everything-forex/topics

      Andre Hawkins <ahawk1958@yahoo.com> Nov 24 04:12PM -0800  

       Dear Member: 
       
       
      I am a new member to your group and I have a brand new blog. I seek constructive criticism onm y blog. For any and all constructive comments I will send youa ceertificate that ...more

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