Forex trend detector ea

The reason is simple: just like eating healthy and staying fit, money management can seem like a burdensome, unpleasant activity. It forces traders to constantly monitor their positions and to take necessary losses, and few people like to do that. However, as Figure 1 proves, loss-taking is crucial to long-term trading success. Amount of Equity Lost Amount of Return Necessary to Restore to Original Equity Value 25% 33% 50% 100% 75% 400% 90% 1,000% Figure 1 - This table shows just how difficult it is to recover from a debilitating loss. Note that a trader would have to earn 100% on his or her capital - a feat accomplished by less than 1% of traders worldwide - just to break even on an account with a 50% forex trend detector ea loss.

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At 75% drawdown, the trader must quadruple his or her account just to bring it back to its original equity - truly a Herculean task! Although most traders are familiar with the figures above, they are inevitably ignored. Trading books are littered with stories of traders losing one, two, even five years worth of profits in a single trade gone terribly wrong. Typically, the runaway loss is a result of sloppy money management, with no hard stops and forex trend detector ea lots of average downs into the longs and average ups into the shorts. Above forex trend detector ea all, the runaway loss is due simply to a loss of discipline. Most traders begin their trading career, whether consciously or subconsciously, visualizing "The Big One" - the one trade that will forex trend detector make ea them millions and allow them to retire young and live carefree for the rest of their lives. In forex, ea detector trend forex this fantasy is further reinforced by the forex trend detector ea folklore of the markets. Who can forget the time that George Soros "broke the Bank of England" by shorting the pound and walked away with a cool $1-billion profit in a single day? But the cold hard truth for forex trend detector ea most retail traders is that, instead of experiencing the "Big Win", most traders fall victim to just one "Big Loss" that can knock them out of the game forever. Traders can avoid this fate by controlling their risks through stop forex trend detector ea losses.

In Jack Schwagers famous book "Market Wizards" (1989), day trader and trend follower Larry Hite offers this practical advice: "Never risk more than 1% of forex trend detector ea total equity on any trade. By only forex risking trend detector ea 1%, I am do automated trading system indifferent to any individual trade. A trader can be wrong 20 times in a row and still have 80% of his or her equity left. The reality is that forex trend detector ea very few traders have the discipline forex fury ea best settings to practice this method consistently. Not unlike a child who learns not to touch a hot stove only after being forex trend detector burned ea once or twice, most traders can only absorb the lessons of risk ea trend detector forex discipline through the harsh experience of monetary loss. This is the most important reason why traders should use only their speculative capital when first entering the forex market.

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When novices ask how much money they should begin trading with, one forex trend detector ea seasoned trader says: "Choose a number that will not materially impact your life if you were to lose it completely. Now robo forex trading subdivide that number by five because your first few attempts at trading forex trend detector ea will most likely end up in blow out. " This too is very sage advice, and it is well worth following forex trend for detector ea anyone considering trading forex. Generally speaking, there are two ways to practice successful money management. A trader can take many frequent small stops and try to harvest profits from the few large winning trades, or a trader can choose to go for many small squirrel-like gains and take infrequent but large stops in the holy grail forex strategy hope the many small profits will outweigh the few large losses.