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Thread: Winning Strategy (Secret of Success Through Money/Risk management)

  1. #1
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    Winning Strategy (Secret of Success Through Money/Risk management)

    I have being wondering within myself the main reason why traders are losing too much money in the market, and all that comes to my mind is the fact that traders are not engaging in the proper money and risk management when they trade the market. The market is so risky, it is not a place we should be gambling our money, it is the seriousness of traders that will help them to be successful. The issue with most traders is never the lack of the good trading strategies that most traders are insinuating upon, because if you asked a fellow trader the strategy he or she is using, they will tell you that it is strategy A or B or C etc..., and when you check that strategy, you will realize that it is such a strategy that is working with more than 75%. Now tell me, what else does any traders need as strategy when they already have 75% winning strategy, but yet they are losing? So, money and risk management has to be well calculated and monitored if traders will want to be successful.


    Analysis and Calculations: Let us assume that a trader has a winning strategy of 75% and a capital of $500. And the trader is using money and risk management of 10% and 1:2 respectively. Also, let us assume that the trader equally use stop loss of 50 pips and take profit of 100 pips. However, when the trader makes 20 different trades, then the follow calculation below applies:

    Number of trades: 20 trades

    Percent of winning strategy: 75%

    Number of winning trades: 15 trades

    Number of losing trades: 5 trades

    Money management: 10% {The trader will risk only $50 per trade}

    Risk management: 1:2

    Pips value for winning: 15 trades x 100 pips for winning x 2 for reward = 3000 pips

    Pips value for Losing: 5 trades x 50 pips for losing x 1 for risk taking = 250 pips

    Total profit = 3000 pips for winning - 250 pips for losing = 2500 pips.



    Can you imagine this big value (2500 pips) of profits with just a simple calculation and 75% winning? This is to show the extent at which traders are missing when they are pursuing the best strategies all round, whereas it is the money and risk management they supposed to focus upon. I put this together for traders to have their eyes opened and outsmarts the market with this simple calculation.

    However, emotion is another cause of failure, just make sure that you do not allow emotion in your trading. Be serious and be disciplined, and before you know it, emotion will vanish away. Because, if you allowed emotions, all this plans i explained above will not be used accurately by you, and you will still be losing in the market.

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  2. #21
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    It's very good to have a winning system. This is what will give us the chance to plan much well on our trade and see we have all it takes to become successful in trading. With a good wining strategy we will have the option to build a quality trading that will help us out to succeed in the best time. If we must make it in this business, then it's essential we learn and follow the right means of building a good system and having a good risk management plans to follow.

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  3. #22
    Trader Toyen's Avatar
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    Quote Originally Posted by Tonycee View Post
    It's very good to have a winning system. This is what will give us the chance to plan much well on our trade and see we have all it takes to become successful in trading. With a good wining strategy we will have the option to build a quality trading that will help us out to succeed in the best time. If we must make it in this business, then it's essential we learn and follow the right means of building a good system and having a good risk management plans to follow.
    Winning systems are good for income earning, when you have one and use it in the correct way, you will not be seeing the forex market as a bad investment anymore. The quality of our trading is about the trading system we are using and it will be nice when we don't rush while developing it, and it needs patience to be traded rightly.

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  4. #23
    Trader cutiekc's Avatar
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    Quote Originally Posted by Toyen View Post
    Winning systems are good for income earning, when you have one and use it in the correct way, you will not be seeing the forex market as a bad investment anymore. The quality of our trading is about the trading system we are using and it will be nice when we don't rush while developing it, and it needs patience to be traded rightly.
    We ought to know that before we have a winning trading strategy, we need to first of all have a good discipline and market knowledge. We all talk about money and risk management and all that, but quick to forget that when a trader hasn't gotten the discipline, then certainly nothing will work for them.

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  5. #24
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    Quote Originally Posted by Toyen View Post
    Winning systems are good for income earning, when you have one and use it in the correct way, you will not be seeing the forex market as a bad investment anymore. The quality of our trading is about the trading system we are using and it will be nice when we don't rush while developing it, and it needs patience to be traded rightly.
    Winning trading system is rare in the market, this is because it is a complete trading system, and i think that every trader have to posses it. If you have a winning system really, then congratulations to you, you need a good dedication with it in order to give you the success that you deserve by using it. I love this trading system on my thread here, that is why i share it with you guys, and i am certain that the trader that use it well will never regret their actions.

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  6. #25
    Trader techboy's Avatar
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    It is easier to compute the numbers but it is way too different when a trader is trading in live market situations, if market can be just as easy as what you presented then majority of traders now will be making a lot of money, but what actually happens is the opposite,for me what is important really is the individual skill of the trader that matter most in one's trading because it is him that make certain trade decisions, if he make mistakes he will loses more money.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

  7. #26
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    Hoping to win and make consistent profits from forex, good risk management is essential and this is what will give us the best right chance to maintain a good trade. If really we must make a good trade from forex, we must know that good management is an essential key to trading good. Nothing good comes so easy and good planning is what will give us the best chance to win.

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  8. #27
    Trader cutiekc's Avatar
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    Quote Originally Posted by ajagbeolegba View Post
    Winning trading system is rare in the market, this is because it is a complete trading system, and i think that every trader have to posses it. If you have a winning system really, then congratulations to you, you need a good dedication with it in order to give you the success that you deserve by using it. I love this trading system on my thread here, that is why i share it with you guys, and i am certain that the trader that use it well will never regret their actions.
    I don't think they are just rare, I think the problem is that traders can't really get to be that up to the task that is been needed from them before they can have successful trading system, in the sense that if traders could take learning seriously, I am sure they can turn thing around and become successful. Winning strategy depends on how we handle things.

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  9. #28
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    This is very good winning ratio in which you are win 15 trades and lose only 5 times. if you are use good money management then you will definitely make good and high profit with this trading strategy. If our money management and planning is good then we will always earn good money. traders are lose their money only when they are making mistakes on their trades.

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  10. #29
    Trader ola4real's Avatar
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    Quote Originally Posted by Wechs View Post
    This is very good winning ratio in which you are win 15 trades and lose only 5 times. if you are use good money management then you will definitely make good and high profit with this trading strategy. If our money management and planning is good then we will always earn good money. traders are lose their money only when they are making mistakes on their trades.
    It is a good ratio when we think well about trading, it backs the management of the account of the trader. It is good to have the strategy that has a very powerful potential to make more winning than losing, this makes trading to be more convenient for us. I like a higher risks to reward ratio than 1:2 if i am the trader, that will make the result of my plan to increase.

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  11. #30
    Trader layigold's Avatar
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    If any trader desires to last long in trading industry , he must take proper risk and money management so seriously because that is the only thing that can make a trader comes out of the challenges of trading unhurt . It is no longer new that forex trading carries a very high level of risk and a slight mistake in trading is capable of wiping out the entire trading account completely most especially when risks of trading are not properly managed . The greater percentage of loss traders experience in this trading business are caused by improper risk and money management .

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