money management in the long run

money management will make us money in the long run, but now we’d like to show you the other side of things. What would happen if you didn’t use money management rules?
Consider this example:
Let’s say you have a $100,000 and you lose $50,000. What percentage of your account have you lost? The answer is 50%. Simple enough. Now, what percentage of that $50,000 do you have to make in order to get back to your original $100,000? It’s not 50%--you’d have to make back 100% of your $50,000 to get back to your original $100,000. This is called drawdown. For this example, we would’ve had a 50% drawdown.
The point of that little illustration is that it is very easy to lose money and a lot harder to make it back. We know you’re saying to yourself, “I’m not going to lose 50% of my account in one trade.” Well we would certainly hope not!
However, what if you lost 3, 4, or even 10 trades in a row? That couldn’t possibly happen to you, right? (Sarcasm used) You have a trading system that wins 70% of the time, so there is NO way you could lose 10 trades in a row. (Even more sarcasm used)
Well, while you may have a good system, consider this example:
In trading, we are always looking for an edge. That is the whole reason why traders develop systems. A trading system that is 70% profitable sounds like a very good edge to have. But just because your trading system is 70% profitable, does that mean for every 100 trades you make, you will win 7 out of every 10?
Not necessarily! How do you know which 70 out of those 100 trades will be winners?
The answer is that you don’t. You could lose the first 30 trades in a row and win the remaining 70. That would still give you a 70% profitable system, but you have to ask yourself, “Would you still be in the game if you lost 30 trades in a row?”
This is why money management is so important. No matter what system you use, you will eventually have a losing streak. Even professional poker players who make their living through poker go through horrible losing streaks, and yet they still end up profitable.

The reason is that the good poker players practice money management because they know that they will not win every tournament they play. Instead, they only risk a small percentage of their total bankroll so that they can survive those losing streaks.
This is what you must do as a trader. Only risk a small percentage of your “trading bankroll” so that you can survive your losing streaks. Remember that if you practice strict money management rules, you will become the casino and in the long run, “you will always win.”

$$ management

Why is it important? Well, we are in the business of making money, and in order to make money we have to learn how to manage it. Ironically, this is one of the most overlooked areas in trading. Many traders are just anxious to get right into trading with no regards to their total account size. They simply determine how much they can stomach to lose in a single trade and hit the “trade” button. There’s a term for this type of investing….it’s called GAMBLING!
When you trade without money management rules, you are in fact gambling. You are not looking at the long term return on your investment. Instead you are only looking for that “jackpot”. Money management rules will not only protect us, but they will make us very profitable in the long run. If you don’t believe me, and you think that “gambling” is the way to get rich, then consider this example:
People go to Las Vegas all the time to gamble their money in hopes to win a big jackpot, and in fact, many people do win. So how in the world, are casino’s still making money if many individuals are winning jackpots? The answer is that while even though people win jackpots, in the long run, casino’s are still profitable because they rake in more money from the people that don’t win. That is where the term “the house always wins” comes from.
The truth is that casinos are just very rich statisticians. They know that in the long run, they will be the ones making the money—not the gamblers. Even if Joe Schmoe wins $100,000 jackpot in a slot machine, the casinos know that there will be 100 more gamblers who WON’T win that jackpot and the money will go right back in their pockets.
This is a classic example of how statisticians make money over gamblers. Even though both lose money, the statistician, or casino in this case, knows how to control their losses. Essentially, this is how money management works.If you learn how to control your losses, you will have a chance at being profitable.
You want to be the rich statistician…NOT the gambler because in the long run, you want to “always be the winner.”

the IMPORTANT thing... ...time...

Have you ever told yourself there’s never enough time in the day? I think we’ve all thought that to ourselves at one point, but if you’re not willing to shift your priorities to make time for trading, then forget about becoming a trader.
Sorry to put it so bluntly, but contrary to popular belief, trading is not a hobby.
Trading is not a hobby.
Trading is not a hobby unless you want to lose money.
Golf is my hobby. I pay to play golf. Golf is Tiger Wood’s business. Tiger Woods is paid to play golf.
See the difference?
Trading is a business
You have to devote yourself to trading just like you would with any other business in order to be successful.
So, it’s time (pun intended) to ask yourself this: “Can I balance my time and change my lifestyle to make room for trading?”
I’d better hear a resounding “YES!”
But before you can even truly answer that question, you need to first figure out what your daily priorities are and determine whether or not you can make trading THE number one priority.
A good way to find this out for yourself is to list your daily activities, and then prioritize them. If your daily priorities take up all of your time, then forget about trading.
So, take a moment to figure out what is going on in your life because it’s very important to balance your time and priorities, not just to become a successful trader, but also to live a content, meaningful life. We all want to be wildly profitable, and initially we may drop everything else to get there, but in the end an unbalanced life will lead to personal and/or professional failure.

the way for LAZY's forex trader to profit

HA! Made you click!
If you really thought there actually was a way for a lazy forex trader to get rich, SHAME ON YOU!
No such thing exists. The word "lazy" and "trader" is an oxymoron. You have to be willing to pay the price to become a trader.
Which brings us to our next lesson....
So, you’ve gone through the School of Pipsology…five times, learned basic analysis and money management techniques, and maybe even opened up a demo account and started trading a plan you’ve created. (You do have a trading plan right?) Now you can sit back and relax because it’s easy money from here on out, right?
Wrong!
You’ve just taken the first step.
You’ve only familiarized yourself with the very basic fundamentals of what it takes to become a professional trader. Now it’s time to get on to the real work.
I’m sure you’re now thinking, “There’s more to learn?!”
Well, my friend, the learning never ends.
As with any profession, whether you’re a doctor, lawyer, athlete, assassin, spy, ninja, ultimate fighter, musician or any other occupation that requires a high level of skill, you can never stop learning and practicing. Otherwise, your skills will deteriorate and you’ll slowly forget what you’ve learned.

For those willing to take the challenge and follow through, professional trading can be a worthwhile goal. But before you dive too deep into forex trading, dip your toe or get your feet wet in the shallow end first, and become familiar with the water. As you get more comfortable, make your way slowly to the deeper end. Take your time.
Be honest with yourself.
Be ready to sacrifice your time and money.
Never stop learning and, most importantly, never quit.
Winners never quit and quitters never win.
The price of becoming top trader is extremely high, but certainly worth it.

...the WORLD'S LARGEST MARKET...

The world has turned a global village, which has afforded too many opportunity to its occupants, which extends to employment opportunities and other financial upliftments too numerous to mention. "If your government cannot meet your employment needs, or even provide for you why not sit inside your bedroom and earn for yourself". Anyway, i dont need to be told that this sound so odd to the hearing of many, because i have been opportuned to meet people from different parts of the world through my computer and see they lack this golden ideas; but for those who knows about it bears me witness and even you that are yet to know about this be my witness. I am overwhelm with lots of joy to bringing this to those who have been blind-folded by physical transactions. Do you know you can make $1.1 billion dollar and more in just one day, like Gorge Soros, who i call a FINANCIAL ACTIVIST. Anyway dont get too mad with that figure, i just mentioned. If you cannot get $1.1 billion dollar like that financial activist, believe me you can get $50 or more in one day. Well, we should base our discussion up something. Get involve in the WORLD'S LARGEST MARKET, trading forex.

what should be in your trading plan???

Trading plans can be as simple or complex as you want it, but the most important thing is that you actually HAVE a plan and you FOLLOW the plan. With that said, here are some of the essentials that every trading plan should have.:-
1. A trading system
This is the heart of your trading plan. This system should be one that you have thoroughly backtested, and have traded for at least two months on a demo account.
Include all the necessary information about your system such as: time frames you use, criteria for entries and exits, how much you risk during each trade, which currency pair(s) you trade and how many lots you trade.
Example: I am an intra-day trader and I trade off of the 10 minute charts. I enter when there is a moving average crossover and all my indicators support the direction. I only trade the EUR/USD and I risk no more than 2% of my account on each trade. For now, I trade 5 mini lots and will increase my lot size according to my 2% money management rules.
2. Your trading routine
This is a crucial part of your plan because it will determine three very important things: when you will analyze the market and plan your trades, when you will actually watch the market to take trades, and when you will evaluate your actions during your trading day.
3. Your mindset
Ask any trader out there and they will all tell you that one of the hardest things to do when trading is to take out your emotions from it. This section of your trading plan will describe what frame of mind you will be in when you are trading.
Example:
I will see what is on the charts and not what I want to see.
No matter how biased I am towards a direction, I will make sure to trade only what my eyes see and not what my feelings tell me.
I will not get “revenge” on the market if I lose on a trade.
I will not beat myself up if I make a losing trade. Instead I will take it as a learning experience and move on.
4. Your weaknesses
Yes, we all have our weaknesses. We just don’t like talking about them. But ask yourself this, “How will you ever get better, if you don’t admit to what you need to work on?” This section will be an objective way to keep track of things that you need to work on in order to become a better trader.
Example:
I tend to overtrade. Whenever I lose on a position, I get upset and immediately try to get “revenge” on the market.
I tend to exit early on trades.
I don’t stick to the rules of my system every time
I don’t stick to my money management rules every time

5. Your goals
“To make a lot of money” is not a good goal. Sit down and really think about what you want to accomplish as a trader. Do you want to trade for a living? How much return can you realistically expect from trading based on your knowledge and experience? Your goals don’t even have to be about making money. Maybe you would like to be more disciplined or gain more confidence. These goals can be personal. What do YOU want to get out of this? Use these goals as your motivation when times get tough. These goals will be your vision, and you must always keep your eyes on the prize!
6. Your trading journal
This will be a valuable tool to helping you become a better trader. Make sure you log all your trades and why you took them. Later down the road you can look back and evaluate your trades and see how you are progressing. I’ve looked back at my trade journal and have seen just how much I’ve grown as a trader. My first entries were very basic and as I’ve progressed, my trades make more sense to me now. I’ve gained a lot of confidence throughout my career and by looking back at my trades, I’ve really been able to evaluate myself and see if I am getting closer to my goals. This tool will help you tremendously in the long run, so take a few minutes each day and log your trades. You’ll be happy you did!

TRADING PLAN

Why Have a Trading Plan?
Uh oh! You’ve learned so much and have come so far in your education, and yet you're still haven't graduated high school. No, you’re not dumb, BUT you didn’t have a trading plan.
Our point is that you can fill your mind with plenty of information, but without a good trading plan and the discipline to stick to it, you will NEVER be profitable.
Think of your trading plan as your map to success. It will be a constant reminder of how you will make money in this market. Of course it’s not required, and if you can make your living by trading without a plan, we will bow down and hail you as the Market Zeus of the Forex.
So you CAN trade without a plan if you want, but before you make that decision, let us give you a few reasons WHY you should have one.
Why Have a Trading Plan?
Reason 1: It keeps you in the right direction
Consistency is very important to have in your trading routine because it allows you to truly measure how successful you are as a trader. If you have a sound trading system but always break your rules, how can you ever really know how good your system really is? Your trading plan will keep you on target. Read it every day and stick to it.

Reason 2: Trading is a business and successful businesses ALWAYS have plans
I have never seen a successful business not start out with a plan. Do you honestly think Walmart was just created on a whim and then magically became successful? Or what about McDonalds? I’m sure almost anyone can make a better hamburger than McDonalds, but the difference between them and the individual is that they have a successful business plan that guides them to success.
In the same way, you can relate the McDonald’s story to your trading career. Whether it’s by luck or experience, everyone can make money in the forex. However, the difference between a losing trader and a successful trader is the PLAN. If you have a good trading plan and you are disciplined enough to stick to it, you will be successful!
Now you know why you should have a trading plan. Let's find out what makes up a trading plan...

trend lines

Trend lines are probably the most common form of technical analysis used today. They are probably one of the most underutilized as well.
If drawn correctly, they can be as accurate as any other method. Unfortunately, most traders don’t draw them correctly or they try to make the line fit the market instead of the other way around.
In their most basic form, an uptrend line is drawn along the bottom of easily identifiable support areas (valleys). In a downtrend, the trend line is drawn along the top of easily identifiable resistance areas (peaks).

Support & Resistance

Support and resistance is one of the most widely used concepts in trading. Strangely enough, everyone seems to have their own idea on how you should measure support and resistance.

When the market moves up and then pulls back, the highest point reached before it pulled back is now resistance. As the market continues up again, the lowest point reached before it started back is now support. In this way resistance and support are continually formed as the market oscillates over time. The reverse of course is true of the downtrend.

Plotting Support and Resistance
One thing to remember is that support and resistance levels are not exact numbers. Often times you will see a support or resistance level that appears broken, but soon after find out that the market was just testing it.

So how do we truly know if support or resistance is broken?
There is no definite answer to this question. Some argue that a support or resistance level is broken if the market can actually close past that level. However, you will find that this is not always the case.

to help you filter out these false breakouts, you should think of support and resistance more of as "zones" rather than concrete numbers. One way to help you find these zones is to plot support and resistance on a line chart rather than a candlestickchart. The reason is that line charts only show you the closing price while candlesticks add the extreme highs and lows to the picture. These highs and lows can be misleading because often times they are just the "knee-jerk" reactions of the market. It's like when someone is doing something really strange, but when asked about it, they simply reply, "Sorry, it's just a reflex."
When plotting support and resistance, you don't want the reflexes of the market. You only want to plot its intentional movements.