A forexbrokercashbacke you do cashback forexg trading to make money or seeking excitement? You dont have to tell me, just show me t Bestforextradecashback records of the trades you make Best forex trade cashback Ill know. No detailed records? Well, that in itself bestcashbackprogramsforex an answer if you stick to your records, then the tilt of your money curve will show you the trades you made Most people enter the market to make money, but soon lose that goal and move on to chase some private version of fun Trading games are much more fun than playing solitaire, it fills your dreams with wealth and power People trade to escape the boredom of life Or to show off their ingenuity to trade for as many neurotic reasons as there are people who trade, but only one is realistic than zero-risk investments, such as short-term Treasury bills to make more money (Note: the U.S. Treasury issues a short-term bond, one year or less to maturity, sold at a discount on par value) Successful trading is based on the 3 Ms: mindset, approach and money management mindset ( Mind) refers to the psychology of trading, method (Method) refers to market analysis, money management (Money) refers to risk management this last M is the most critical factor for success in your money management process, you must draw your own money curve, it will reflect not only your mindset, but also the quality of the methods you use anyone in trading may have made money, even in In the casinos of Las Vegas, you will continuously hear the musical sound of hitting the jackpot and coins trickling out of the slot machines like water, causing a joyful noise, but how many players will return to their rooms with more money than they went to the casino with? In the market, almost everyone can make a good trade, but few can manage to keep their money growing all the time Money management is the skill of managing your trading capital Some call it an art, or a science, but in reality it is a combination of both, where the science dominates The goal of money management is to accumulate money by reducing losses on losing trades and maximizing gains on winning trades When you see the pedestrian light on and cross the street, you still have to look around to see if a crazy driver is crossing against the light regardless of the signal. Whenever your trading system gives you a trading signal, money management is just like looking around when crossing. A group of successful money managers father started to develop his sons business talents when he was a teenager he used to take him to the racetrack on weekends and give him $10 for his lunch and betting money that day father was with his friends all day and his son could come over and ask him if he had questions but would not get an extra $1 from here again he had to make his own money by betting on the horses and if he still wanted to have lunch He had to manage his own money to study handicap racing (technical analysis), manage his own racing money (money management) and wait for the best opportunity (mindset), after the son joined his father to manage the arbitrage fund to win a million times a good trading system gives you a sharp edge to fight in the market to use a technical program, after a long series of trials it provides a positive expectation after After a long series of trades, a good system ensures that wins outweigh losses If your system cant do that, you need money management, but if you dont have a positive expectation, no money management will save you from losses For example, a roulette player is a negative expectation to have a US one The roulette wheel has 38 poker slots, in Europe there are 37, but only 36 when playing, the casino has the remaining 1 or 2 a slot about 2.7% of a gambling wheel, after a period of work, the casino has a high win rate in each game, slowly draining the player has a primitive money management system called doubling the bet, the player starts with only the smallest bet, usually 1 So in theory, as they gradually win, they make back all their losses plus $1, and then start again with a $1 bet. On the other hand, in blackjack, very disciplined players who follow a tested strategy and count their cards have a slight advantage over the casino, about 1% to 2%, sometimes a little more, when a good card counter needs money management, betting smaller when the cards are bad and doubling down when the cards are good. Because they do work, and when we fail, we die like traders. No matter what rate you lose, you have to make more money to compensate. If you say $70, then read the above again $70-$7010%=$63, $63+$6310%=$69.30 If you subtract 10% and then add 10%, the final result is a loss below the initial value like falling into a hole in the ice. What happens when a traders account slips from $10,000 to $6,600? His account loses 34% and he has to win 50% to get back to $10,000. Is it possible for a trader who just lost a third of his capital to make 50%? He is at the bottom of an icy hole and he either dies or he puts his money back in. The key question is whether he can learn from his failure. The market is like a gentle gladiator in a battle where life is measured in money and everyone is trying to take money out of you. Competitors, merchants and brokers, it is easy to lose money, but it is hard to make money. Money management has two purposes: to survive and To achieve success is first to survive, second to try to maintain steady gains, and finally to make huge gainsBeginners usually get these priorities backwardsThey go straight for the huge gains, never thinking about how to survive in the long run, putting survival first allows you to focus on good money managementDisciplined traders usually focus on minimizing losses and accumulating capitalThe most successful I know The most successful trader I know often says that he is afraid he will end up driving a taxi, his engineering degree is expired, he has no work experience other than the market, and if he fails completely in trading, the only way out is to drive a taxi, he has made millions of dollars and still tries to avoid losses, he is one of the most disciplined people I know. Most of us rarely do calculations and are used to calculators and digital displays on our devices If you can count the total number of guests at a party, or figure out how many six-packs of beer you have left after two, then youre in good shape You can get by without any math, but not in the market Trading is a numbers game If you cant do math, you cant trade You dont need to know calculus or advanced algebra, but you must be familiar with basic arithmetic addition, subtraction, multiplication and division. They are very good at arithmetic, they are calm, practical, responsive and can quickly calculate risks, outcomes and odds. You need to be self-taught, you have to train yourself in mathematics, one of the easiest ways to do this is when you go to the store and buy something, estimate the total cost orally when you hand the cashier the money, calculate how much he or she will find for you mime in your own mind the sales tax persistently practice and persist in getting out of the comfort of the shell of modern society where customers dont need to calculate read a book or two on probability theory Its a bit of a pain, isnt it? Yes, it takes some time, right? Its definitely going to take time. Learning to do the math is never fun, but it can help you succeed in trading How wide is the channel? What is the ratio of distance from your stop loss to profit target? If you dont want to risk l% of your account and your stop loss is 1.25 pips from the current price, how many shares should you buy? These and other similar questions are the key to successful trading being able to answer them on the fly will give you an edge over the countless crowd of amateur traders Traders Risk and Loss Remember the example we talked about earlier? A small trader with a fruit and vegetable stall can sell a few baskets of fruits and vegetables a day and what if his wholesaler supplies him with baskets of fresh and rare fruits? He might make money on it, but if the locals dont like that fruit to the point that all of that frame goes bad, a basket of fruit wont hurt his business very much thats a normal business risk  Now imagine he buys a tractor load of that fruit at a very low price if he sells them all he can make a fortune, but if they dont sell but bad, it would seriously hurt his business and might make it impossible for him to do it a basket represents an acceptable risk, but a tractor is a fatal risk the difference between a traders risk and a loss is their size relative to the account a traders risk puts you in normal money fluctuations, but a loss can threaten your success and survival you must draw a line between the two and never Whenever you buy a stock and place a stop loss below it, you have to limit the value at risk per share Money management rules as a whole limit your total risk in any trade so that only a small percentage of your account is at risk If you know the maximum allowable risk per trade, and per share or contract, then calculate how much you should trade. If you know each trade, and your maximum allowable risk per share or contract, then calculating how many shares or contracts you should trade is a simple matter of arithmetic. Money management rules are necessary for your survival and success. Traders break their own rules will you follow your own rules? I was recently invited to moderate a market psychology panel at a gathering of money managers. One of my panelists had close to a billion dollars under management, he was a middle-aged man who had been in business since he was in his 20s and had worked for a marine consulting firm since he graduated from school. I had to go to someone else, he said, to borrow some money from them I explained to them what I was going to do, and once they gave me the money, I insisted on following my system deviating from it was very unreasonable, and my poverty and honesty helped me If you want to trade, you have to take risks A trader who is anxious about a penny of profit or loss, too restrained to place orders although you have to Accept risk, but dont accept losses What is the definition of a loss? If your capital is your life, the market can swallow it up like a shark and eliminate you from the market with a single heavy loss or it can bite you to death like a piranha, each bite may not be fatal, but the bite will keep on making you a pile of bones. The money management rule is the 2% rule to help protect you from sharks and piranhas - the shark against unmanageable losses that are like a painful finger sticking out of most accounts Traders often look at their trading history and see that it was a terrible loss or a small string of vicious losses that did them the most damage If they had stopped out first, their account floor would have been much higher Traders They need rules to remind them when to jump out of a losing trade instead of blindly waiting and praying for a market reversal Good market analysis alone doesnt make you a winner The ability to find good trades doesnt guarantee success A lot of research wont necessarily bring you any profits unless you can protect yourself from sharks I have seen traders make 20, 30, even 50 potentially profitable trades at the same time and still end up with losses when you have a winning streak and it is easy to think you know the game. A good trader expects to end the year with a profit, but ask him if he will make money on his next trade and he will honestly answer: I dont know. He uses stops to prevent losing trades from hurting his account Technical analysis helps you decide where to stop to limit your losses per share Money management rules To help you protect your entire account, one of the most important rules is to limit losses on each trade to a small percentage of your account and limit losses on any trade to 2% of your net trading account. This is your real risk capital, your net equity in the company you are trading with. It includes the cash and cash interest in your account, as well as the market value of all open positions today. Your profit target is $26 and your stop loss is set at $18. So how many shares of XYZ can you buy? 2% of $50,000 is $1,000, i.e. your maximum acceptable risk to buy at $20 and set a stop loss at $18. Then your risk per share is $2. Divide the maximum acceptable risk by the risk per share to get the number of shares you can buy at $1,000. Dividing by $2 results in 500 shares which is the theoretical maximum number of shares In reality, that number should be lower because you have to pay commissions and be prepared to deal with the effects of slippage, so none of these costs can add up to more than the 2% limit So 400 shares, not 500, is your trading limit Ive noticed a very strange difference in how people react to the 2% rule Poor beginners think the number is too small At a recent seminar, I was asked if the 2% rule could go up a bit for small accounts I replied that there was no benefit to extending the rope when he went bungee jumping The reaction of experts is the opposite, they often say that 2% is too high and they try to make the risk a bit lower A very successful arbitrage fund manager recently told me that he plans to increase his trading volume over the next He had never risked more than 0.5% of his net capital in a single trade, but now he has learned to increase his risk ratio to 1%. If that trade requires a higher risk, then abandon it. How much will the 2% limit be? Answer quickly! Remember, to be a good trader, you have to be good at arithmetic! If you have $105,000 in your account, the 2% rule will allow you to risk $2,100 and trade a little more. Conversely, if you lost money last month and your net worth dropped to $95,000, the 2% rule will limit you to risk $1,900 in the next month. When you underperform, it will force you to reduce the amount of your trade, which makes your trade amount tied to your own performance. For example, if you have one account for stocks and another account for futures in that case, use the 2% rule futures selection table in operating each account separately Imagine there are two traders, Mr. Hare and Mr. Turtle, each with a $50,000 account, and they are watching two futures markets, S&P and corn, and the astute Mr. Hare notices that the average daily price range for S&P is about 5 points. price range was about 5 points at $250 per contract Corns average daily price range was 5 cents at $50 per contract He quickly concluded that if he could only catch half of the daily price range, he could make $500 per contract in S&P, while using the same level of skill, he could only make a little more than $100 in Corn Mr. Rabbit called his But the prudent Mr. Turtle has a different algorithm First, he uses the 2% rule to calculate the maximum amount of money he can risk in his account $1,000 In S&P, using such a small account with only $1,000 a day is like trying to catch a tiger that is very big but has a very short tail On the other hand, if he On the other hand, if he trades corn, he has a greater ability to survive that tiger is smaller and has a long tail that he can wrap around his waist Mr. Turtle buys a contract for king rice So who will ultimately win out of Mr. Hare and Mr. Turtle? When choosing futures in the futures market, compare your capital with recent market volatility levels. First calculate 2% of your account capital. relatively stable and can be relatively safe to set a stop loss Why 1% and not 2% earlier? The first column of Table 7.1 shows the futures market, the second column shows the price of each contract, the third column shows the current safezone indicator, the fourth column shows the result of multiplying the safezone indicator by 2, and the fifth column shows 2% of the account capital, in this case $30,000. If the latter is greater than the former, that market is suitable for trading. The data in Table 7.1 is current at the time I wrote it, because both the volatility and the safezone indicators are constantly changing, so you must update them monthly when you use them. Change to the latest data and find out which futures are right for you to trade If you dont have enough money to trade that futures, you can still put it down and be prepared and do a demo trade, just like a real trade So that when your account is big enough or that futures becomes calm enough, you can be very prepared to enter the trade 6% rule - guard against piranhas What puzzles me is why Public institution trader groups perform so much better than private traders Private traders are generally around 50 years old, married, college graduates, usually experts in something, or have their own companies You can think carefully about why people who are computer savvy and read books all day would surround people who are around 25 years old, played ball a lot in college, and havent read a book since graduation actually Is it because most private traders have a trading life measured in months, while public sector traders make big money for their companies year after year because they are responsive? No, young private traders are eliminated just like older ones, either because public traders have plenty of training opportunities, but the fact is that most firms are very stingy. Some public traders, after making a lot of money for their firms, want to go out on their own. What awaits them is a few months later, most of the cowboys are back to headhunters to work as traders Why do they make money for the company, but not for themselves? When a trader in a public institution quits, he leaves the manager who has his discipline and risk control. That manager sets a maximum risk for each trade for each trader. This is similar to the 2% rule for private traders. A trader can break the 2% rule and deceive himself by hiding it, but the manager of the investment firm keeps an eye on his traders like a hawk Private traders can throw their order confirmation slips into a shoebox, but the trading manager is quick to dismiss those impulsive traders who save the public institutions traders from the significant losses that have bankrupted many private accounts When a traders losses reach that level, his trading privileges are temporarily revoked for the rest of the month. Most private traders, while holding losing positions, try hard to break even and the loser thinks that a successful trade is coming and he is about to have his moment. Trading managers force their traders out of trading when they reach their maximum monthly loss. Imagine an office where colleagues are trading constantly while you sharpen your pencil and run out to find sandpaper. My friend knew he had to remove her trading rights, but she was very sensitive, so my friend didnt want to hurt her feelings. He found a financial management course in Washington and sent her to study to get through the rest of the month. Whether gentle or brutal, the monthly loss limit shields traders from the threat of piranhas, a series of vicious losses that add up to a deadly series of losses. A bullish person may fall into the river, be attacked by piranhas, and in a few minutes will see his skeleton reflected brightly in the water. Traders use the 2% rule to fend off shark attacks and must also use the 6% rule to protect themselves from piranhas as long as your account balance drops to 6% from the end of the previous month, stop trading for the rest of the month and count your money every day, including your As soon as your capital loss approaches 6% of your capital on the last day of the previous month, stop trading immediately to close all those open positions and spend the rest of the month off the floor to continue monitoring the market, tracking your favorite stocks and indicators, and if you wish, do some demo trading to revisit your trading system Was the loss an accident, or was your system inherently flawed? Traders who leave the firm know how to trade, but their discipline is external, not internal, and without their manager present, they quickly lose money on trades Private traders dont have a manager This is why you need to have your own disciplinary system The 2% rule will save you from fatal losses, while the 6% rule will help you escape a string of losses The 6% rule forces you to do what most people Lets look at an example of trading with these rules. For simplicity, lets assume that each trade we risk 2% of our account capital, although in practice we try to reduce the risk. He writes down the maximum amount he can risk for the next month: 2% or $2,000 for each trade and 6% or $6,000 for the total account A few days later, that trader finds an attractive stock A and plans where to place a stop loss, then buys a position, putting $2,000 A few days later, he eyes stock B and makes a similar trade, putting another $2,000 at risk. should buy in? No, because he already has 6% of his account at risk. He has opened three positions, each with 2% risk, which means he will lose 6% if the market goes against him. At this point, the 6% rule prohibits him from taking further risks. Buy it now? Yes, he can, because he is currently only risking 4% of his account capital. Both Stock B and Stock C are risking 2%, and since the stop is already above the no-loss level, the trader is already in a zero-risk position. Should he buy? By the 6% rule, no, because in stocks B, C and D (in stock A, which already has no risk to its principal), his account is already 6% at risk He must abandon stock E A few days later stock B falls, triggering its stop loss, and stock E still looks fascinating, should he buy it? No, because in stock B he has already lost 2% and in stocks C and D there is still 4% exposed, adding either position at this point would put his account at risk for the month by more than 6% The 6% rule keeps you safe from piranhas Get out of the water when they start to bite you, dont let the vicious ones slowly bite you to death If you risk less than 2% per trade, you If you risk only l% of your account principal, you can establish 6 positions before you reach the 6% limit The 6% rule protects your principal starting point is your account principal from the previous month, dont add the profits you made this month to it If you made a big profit last month, you will have to reset your stop loss and trade size when you enter the next month so that the amount risked on any one trade does not exceed 2% of the new principal The 6% rule allows you to trade larger sizes the following month if you are underperforming, it will reduce your size for the following month. The market moves in your favor, you move your stop loss above the no-lose level and build more positions, if your stock or futures start to move against you and trigger a stop loss, you will lose the maximum allowable loss for the month and stop, protecting most of your account to continue trading the next month The 2% rule and the 6% rule provide guidelines for pyramiding accumulated positions Increasing positions that are winning if you buy a stock and it starts to rise, then you move your stop loss above the no-lose level, and as long as the risk on the new position does not exceed 2% of the account principal and the total account risk is less than 6%, then you can buy more of the same stock Each accumulation should be treated as a separate trade Most traders are in a state of constant mood swings, giddy at the highs and depressed and frustrated at the lows If you want to be a disciplined trader, the 2% and 6% rules will convert your willingness to trade the size of a realistic position into a safer trade A few years ago, the owner of a local stock trading firm, asked me to give a psychology training to his traders When they heard that a psychiatrist was coming, they were shocked and protested loudly that we were not crazy! It was only when the manager told the guys they had to attend or leave that they quieted down. Once we got in touch and focused on psychology and money management, the results were very different. The rest of the traders were using the same system, but making less money, and only a few were losing money. At our first workshop, one trader complained that he had been losing money for the last 13 days in a row, and his manager was there to confirm that he was trading according to the companys system, but not making any money. Then I asked him how many shares he had traded, because the firm had set a limit for each trader. He was allowed to trade 700 shares at a time, but because of the consecutive losses, it was reduced to 500 shares. Then, after another two-week profitable period has passed, he can trade 300 shares, and so on. For every two weeks of profitable trading, he is allowed to trade 100 more shares. If he has one losing week, he has to go down one level until there are two more consecutive profitable weeks. The trader protested loudly that 100 shares was too few and that he would not make any money. I told him not to lie to himself because a larger trade size would not make him money either. He continued to make money for the next week and then the trade size went up to 200 shares. At our next workshop he asked me, "Do you think thats a psychological problem? The participants laughed out loud. Why does a trader lose money when he trades 500 shares and make money when he trades 100 shares? I took a line of $10 bills out of my pocket and asked if anyone would like to have it, all he had to do was climb up on the slender table in the conference room and walk from one end to the other and the bill would be his, a few people raised their hands and waited, I said, I have a better idea who just has to come with me to the roof of our 10-story office building and use a board as wide as this table I started to encourage them that the board would be as wide and as strong as our conference table and we would do it on a windless day and then I would pay $1,000 on the spot that was about the same skill required to walk across the conference table but the pay was much higher still no one responded why? Because if you lose your balance on the conference table, you only need to jump two feet to land on the carpet but if you lose your balance on the roof of two buildings, you will fall to the asphalt and fall to pieces When the risk level goes up, our ability to perform goes down Beginners tend to make money when trading small amounts that gives them a little experience and confidence to increase their trade size and start losing them Most beginners are eager to make a lot of money, but overtrading, especially when it comes to trading sizes that are too big for you, is not the way to go. The ambitious trader might buy five contracts of 100 ounces of gold each, and if the price of gold fluctuates by $1, his account fluctuates by $500 If the gold market moves against him, hes totally screwed If gold moves in his favor, he begins to believe he has found a golden path to making money, continues to trade without regard for the consequences, and ends up broke on his next trade The morally bankrupt brokers, however, encouraged overtrading because it would make them a large commission Some stockbrokers outside the United States, offered a 10:1 take, where you could buy $10 worth of stock for a $1 advance, and some currency exchanges offered a 100:1 take When a diver with an underwater breathing apparatus jumped from a boat into the water, there was a device called an octopus That device consists of several tubes, one that goes to his mouth, one that goes into his wetsuit, and one that goes into a gauge that indicates how much oxygen is left in his tank If the air pressure drops too low, he wont have enough oxygen to get back to the surface, which is why diving is a deadly sport for the untrained and the grumpy Making a deal is like going in search of treasure Like going in search of treasure, there is gold buried beneath the rocks at the bottom of the ocean When you dig, remember to look at your air pressure from time to time, how much gold can you dig up with the guarantee of staying alive? The bottom of the ocean is littered with the remains of divers who have discovered a great opportunity professional divers first consider the amount of oxygen remaining if he did not dig up gold today, he can come back tomorrow, all he has to do is save his life and come back again diving beginners but kill themselves by running out of oxygen the lure of free gold at the bottom of the ocean is so strong free gold! This reminds me of a famous Russian saying the only free thing in the world is cheese in a mouse trap Some African tribes catch monkeys by putting some delicious food into a thin-necked jar and then tying the jar to a stump on the ground Monkeys put their hands into a jar and grabbed a piece of food, but couldnt get it out because only empty hands could get through the narrow neck of the jar when the hunter came When the hunter came to grab it, the monkey was still holding on to the bait in the jar. The monkey, being greedy, did not want to let go after grabbing it and ended up in the hands of the hunter. Then, if you have a medium level trading system, youre already way ahead of the game. Overtrading - making trades that are too big for you is a fatal mistake. Once you have become familiar with how to trade looking for trades, entering, setting stops and take profit targets, and exiting you can gradually increase the size of your trades so that your account starts to generate significant income for you A new trader came to see me recently. trading the market he had been losing nothing, trading anywhere from 100 to 1000 shares at a time he often made some money on a few small trades in a row and then lost it all on one big trade I told him he was already ahead of that game because unlike most beginners he was not losing money then I gave him a standard prescription to start out trading 100 shares, the smallest stock trading unit Once you have a profitable cycle, then move up from 100 shares to trading 200 shares after another profitable cycle and start trading 300 shares if you have a losing If you have a losing half-cycle (1 week for day traders, 1 month for swing traders), then go back to the previous trade size and start over If you trade futures, replace 100 shares with one contract, moving slowly forward and backing up quickly in Ralph Vinces seminal book, "The Stock Exchange". Vinces seminal book, The Equity Management Formula, he introduced the concept of optimal f. Optimal f refers to the optimal amount of risk in your account in any given trade in order to maximize long-term returns That book requires more mathematical knowledge, but summarizes the main concepts as follows: every trade has an optimal f; if you trade less, the riskiness decreases in mathematical probability, and the profit decreases in geometrically declining; if you consistently trade more in size than the optimal f, then you are doomed to bankruptcy optimal f is not the same on every trade, so it is difficult to calculate In the long run, it offers the highest rate of return, but it also causes a vicious decline that can exceed 90% of the account Who would be so tenacious as to continue using a system that shrinks their account from $100,000 to $9,000 trading? The main value of the optimal f is only that it reminds us that if we trade too big, we will ruin our account. If you cross the area marked by the optimal f, you will enter a minefield, stay away from the minefield and trade smaller than the optimal f. Beginners tend to put the cart before the horse when calculating profitability. Here are the steps to proper money management: 1. Measure your total cash, cash equivalents and open positions at the first of each month 2. For each trade, determine your entry and stop loss points: express the amount of risk per share or contract per port as a dollar amount.5 Divide 2% of the principal by the risk per share or port and the result is the number of shares you can trade. If the total risk is 4% of your account or less, you can create another position where you can make a trade with a 2% risk, bringing the total risk to 6%. The amount of risk you can take, not the amount of money you have to make following the 2% and 6% rules If you have a month where most of your trades go very well, you should move your stop loss across the no-lose line and you can add some more positions You can even increase your margin The fascinating thing about this money management system is that when your performance is down, it will cut off your losses, and when you are doing great, it will you go full steam ahead On the 1st of each month, if you have no open positions, the 2% and 6% amounts are easy to calculate If you have some open positions on the 1st, calculate the principal of your account by taking the latest market price and calculating the value of all open accounts plus all cash or money market funds and calculating the 2% and 6% amounts based on those values If you have set your stop loss above the no-loss line on some open trades, you have no principal risk If your stop loss has not yet reached the no-loss line, find the percentage of your principal that is at risk and subtract it from the 6% Once you subtract that from the 6%, the result will tell you whether you can make a new trade. The first problem is that a beginner should concentrate on a single market and only after you have achieved success, you can spread your money among the various markets. Remember, in order to win in the market, your trading system and money management system must both be very good