1st set of Trades

Last night I set my first trade. I lost 1% plus and addition .1% due to a trading error while adjusting the stop Take profit and Stop loss. It is imperative that you use these tools and use them correctly while trading. I entered the trade Long USD/CAD with a market purchase@ 1.32747 my Stop loss was set to gain 3% while my Stop loss was set at 1.32490. During the night there was high volatility and my Stop loss was hit. This morning USD/CAD I bought again Long @1.32865.

My  Big mistake is setting the SL too conservative while aiming too high for the TP. The Stop Loss is an order to close a trade at a specific price to reduce losses. The Take Profit is an order to close a trade a specific price to make profit.

A great rule to follow is to use the Risk Reward Ratio. In essence if a person risks 10 dollars a share and expects to make 20 dollars, the risk reward ration is 1:2. 1 unit of risk for 2 Units of reward

For example is you expect to gain 100 Pips from a trade , set a SL of 50 pips and a TP at 100 pips Your risk reward is now 1:2.

 Higher ratios can be used but beware of volatility. With the wild up and down swings that occur in Forex a trade that is too conservative may close out before fully coming to fruition. Keep calm and trade on.

Losses happen in Forex. It is estimated that Traders are correct in their trades 50% of the time, the number may actually be closer to 30% .Here is a link  to the article  about why people loose money and how to avoid it  on DailyFX. In summary people in many cases do not cut their losses. They try to hold on and get that winning trade even when it goes wildly against them. This is one of the aspects you must overcome while trading. Be humble, pop smoke and get out of their if it goes way against you. Do not let losses run and do not cut profits short. Do the opposite.

Happy Trading

Trade is still open today. We will see where we end up. The US Market opens in 20 Minutes. Good Luck.