The proper application of risk and money management rules gives a forex trader an

account growth edge, while trading forex without a logical money management
strategy typically amounts to little more than gambling.
 Trading successfully in the Forex market typically means growing
your trading account by wisely managing profits and losses using a
sound Forex money management strategy.
Ideally, every Forex trader looking to grow their trading account
should be using a Forex money management system contained within
a trading plan that objectively lays down their goals and how they
intend to manage their trading activities.
Of course, the actual details of each trading plan will differ according
to each individual trader’s personality, choices and preferences, but
every such trading plan should lay down the risk and money
management techniques the trader creating it intends to use.

The proper application of risk and money management rules gives a forex trader an
account growth edge, while trading forex without a logical money management
strategy typically amounts to little more than gambling.
  Leverage and Margin
Table of
Contents  Dealing with Drawdowns

 Position Sizing

 Risk to Reward ratio

 R and R-multiples

 Trading Expectancy

 Trading Performance

 Trading goals

 Trading plan

 Risk Exposure
 INTRODUCTION

o Risk and Money Management is one of the

o Like any other business, Forex Trading involves
most under looked areas in the Forex Trading
taking risk in order to make money, and in order
business.
to make money we must learn how to manage
risk (potential losses).

o This explains why forex risk and money

management practices remain an essential part
of the business that needs to be incorporated
into every forex trading plan.

o In fact, the main reason why novice forex traders

o Many traders spend a lot of their time trying to
discover a perfect strategy with 100% win rate
(which doesn’t exist) and focus less on the fact
o For forex traders, the goal of money
that Trading entails taking considerable
financial risks.
o Your strategy which focuses more on your
entries and exits must be accompanied by the
right risk and money management rules for it to
produce positive results.
fail to grow their trading accounts is due to their
lack of understanding or failure to apply proven
money management principles to their trading
endeavors.
management is to maximize profitability and
minimize losses while conserving trading capital,
while the overall purpose of risk management is
to make sure that various uncertain elements in
trading environment do not derail their chances
of profitability and other measures of success in
their forex trading business.

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 DEFINED

o Risk management involves identifying, o Trading successfully in the forex market typically
assessing and prioritizing currency trading risks means growing your trading account by wisely
and engaging in the use of resources to managing profits and losses using a sound forex
minimize, control and monitor the chances and/ money management strategy.
or effect of adverse events, such as trading
o Ideally, every forex trader looking to grow their
losses, and to maximize the chances and/ or
trading account should be using a forex money
effect of favorable events such as trading gains.
management system contained within a trading
o Money management in trading currencies plan that objectively lays down their goals and
should be a key part of a forex trader’s overall how they intend to manage their trading
risk management strategy. As the name implies, activities.
forex money management involves consistently
o Of course, the actual details of each trading plan
using one or more strategic techniques to make a
will differ according to each individual trader’s
currency trader’s risk capital yield the highest
personality, choices and preferences, but every
return for any losses that might be incurred in
such trading plan should lay down the risk and
the process.
money management techniques the trader
o Money management revolves around the basic creating it intends to use.
idea of conserving trading capital or money by
effectively managing the numerous financial
risks your forex trading account is exposed to.

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 LEVERAGE AND
MARGIN

o Leverage is the ability to trade a larger amount o However, when trading you can decide to use the
of money borrowed from your broker with a desired amount of leverage based on your risk
small amount of money deposited in your comfort. This is called true leverage.
account.
o For example, if your margin based leverage
o It is the increased trading power that is available (maximum leverage) is 100:1, you can open
when using a margin account. positions with 10:1, 20:1 or 50:1 leverage based
on what you desire to use. This will be your true
o Leverage is expressed as a ratio, usually leverage.
expressed with an ―X:1‖ format. For example
100:1, 50:1… o True leverage is the ratio of your open position
size and the amount of money you have in your
o We have all seen or heard online Forex broker’s trading account.
advertising how they offer 3000:1, 500:1
leverage. This is actually the maximum leverage True leverage = Position size
you can trade with when you open an account
with them. Account balance

o It is calculated using the required margin; thus o When using leverage, it’s important to know that
it’s called margin based leverage. it can multiply your profits as well as your losses,
thus leverage is a double edged sword.
Margin based leverage = Position size

Required margin

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 LEVERAGE AND
MARGIN

o Since a trader is allowed to use more money than o Since you are able to trade a $100,000 position
the initial amount he deposited due to leverage, size with just $ 2000, your leverage ratio is 50:1.
a collateral in the form of margin is required by
the broker to ensure that all losses are covered. Free Margin

o When a trader opens a position, they are o Free Margin is the money that is not locked up
required to put up a fraction of that position’s due to an open position and can be used to open
value ― in good faith.‖ In this case, the trader is new positions. When this value is at zero or less
said to be leveraged. than margin, a warning is triggered and
additional positions cannot be opened.
o The ―fraction‖ part which is expressed in
percentage terms is known as the “margin Margin level
requirement”. For example 2%. o Margin level is the ratio between equity and used
o The actual amount that is required to be put up margin. It is expressed as a percentage. For
is known as the “Required margin”. example, if your equity is $5000 and the used
margin is $1000, the margin level is 500%.
o For example, 2% of a $100,000 position size
Margin Level = (Equity/Used margin) X 100%
would be $2000. The $2000 is the required
margin to open this specific position.

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 LEVERAGE AND
MARGIN

Margin call level
o The margin call level is the specific level (%)
where if your margin level is equal or below it,
you won’t be able to open any new positions.
o This process will be repeated until the margin
level increases to a level above 50%
Stop out level = Margin level at X%

Margin call level = Margin level at X%

Stop out level

o The stop out level is the specific level (%) where

if your margin level is equal or below it, your
broker will automatically start closing your
positions until the margin level is greater than
the stop out level.

o For example, let’s say the stop out level is 50%.

This means that if the margin level falls below
50% a stop out will automatically occur and the
position floating the largest loss will be
liquidated automatically.

Margin call

A margin call occurs when you have breached the margin call level but still above the stop out
level.

A margin call is a warning telling you that your account isn't doing too well and that you are close
to having your open positions liquidated at the market price.

You are still allowed to keep your current positions open but you can’t open new positions.

Stop out

A stop out, which happens once the stop out level has been breached is when your open
positions will be automatically closed to prevent a negative account balance.

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 DEALING WITH
TRADING DRAWDOWNS

o A drawdown is the reduction of one’s capital after a series of losing trades.

o This is normally calculated by getting the difference between a relative peak in capital minus a
relative trough.

Losing streak.

o In trading, we are always looking for an edge. o What you don’t know is the sequence of wins
That is the whole reason why traders develop and losses or how much money the market is
systems. going to make available on winning trades.

o A trading system that is 70% profitable sounds o You could loose the first 30 trades in a row and
like a very good edge to have. But just because win the remaining 70. That would still give you
your trading system is 70% profitable doesn’t a 70% profitable system.
mean that out of every 100 trades you make,
you will win 7 out of every 10 trades. o You have to ask yourself whether you will still
be in the game if you lost 30 trades in a row.
o There is a random distribution between wins
and losses for any given set of variables that o This is why risk management is so important.
define an edge. No matter what system you use, you will
eventually have a losing streak.
o In other words, based on the past performance
of your edge, you may know that out of the next o The key to being a successful Forex trader is
100 trades, 70 will be winners and 30 will be coming up with a trading plan that enables you
losers. to withstand these periods of large losses.

o Only risk a small percentage of your trading

capital so that you can survive your losing
streaks.

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 DEALING WITH
TRADING DRAWDOWNS

o The table below shows the difference between risking 2% of your capital per trade compared to
risking 10% per trade.

o If you happened to go through a losing streak and lost only 10 trades in a row, you would’ve
gone from starting with $20,000 to have only $7748 left if you risked 10% on each trade.

o You would’ve lost over 61%% of your account!

o If you risked only 2% you would’ve still had $16675 which is only a 16% loss of your total
account.

o The point of this illustration is that you want to set up your risk management rules so that
when you do have a drawdown period, you will still have enough capital to stay in the game.

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 DEALING WITH
TRADING DRAWDOWNS

o Can you imagine if you lost 60% of your account?!!

o You would have to make 150% on what you are left with in order to get back to break even!

o Here is a table that will illustrate what percentage you would have to make to break even if you were
to lose a certain percentage of your account.

o You can see that the more you lose, the harder it is to make it back to your original account
size.

o This is all the more reason that you should do everything you can to PROTECT your account.

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 Position sizing

o When trading forex, your position size, or trade size in units, is more important than your entry and
exit points. You can have the best forex strategy in the world, but if your trade size is too big or small,
you'll either take on too much or too little risk. And risking too much can evaporate a trading account
quickly.

o Your position size is determined by the number of lots and the type and size of lot you buy or sell in a
trade:

o A micro lot is 1,000 units of a currency

o A mini lot is 10,000 units

o A standard lot is 100,000 units

o Your risk is broken down into two parts⁠—trade risk and account risk. Here's how all these elements
fit together to give you the ideal position size, no matter what the market conditions are, what the
trade setup is, or which strategy you're using.

Set Your Account Risk Limit per Trade

o This is the most important step for o You can also use a fixed dollar amount,
determining forex position size. Set a which should also be equivalent to 1% of the
percentage or dollar amount limit you'll risk value of your account or less. For example,
on each trade. you might risk $75 per trade. As long as
your account balance is $7,500 or more,
o For example, if you have a $10,000 trading you'll be risking 1% or less.
account, you could risk $100 per trade if
you use the 1% limit. If your risk limit is o While other trading variables may change,
0.5%, then you can risk $50 per trade. account risk should be kept constant. Don't
risk 5% on one trade, 1% on the next, and
o Your dollar limit will always be determined then 3% on another.
by your account size and the maximum
percentage you determine. This limit o Choose your percentage or dollar amount
becomes your guideline for every trade you and stick with it—unless you get to a point
make. where your chosen dollar amount exceeds
the 1% percentage limit.
o Most professional traders risk at most 1% of
their account.

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 Position sizing

Plan for Pip Risk on a Trade

o Now that you know your maximum account o A stop-loss order closes out a trade if it loses
risk for each trade, you can turn your
attention to the trade in front of you.
o Pip risk on each trade is determined by the
difference between the entry point and the
point where you place your stop-loss order.
o A pip, which is short for "percentage in
point" or "price interest point," is generally
the smallest part of a currency price that
changes. For most currency pairs, a pip is
0.0001, or one-hundredth of a percent.
o For pairs that include the Japanese yen
(JPY), a pip is 0.01, or 1 percentage point. o When you make a trade, consider both your
Some brokers choose to show prices with
one extra decimal place. That fifth (or third,
for the yen) decimal place is called a pipette.
a certain amount of money.
o It's how you make sure your loss doesn't
exceed the account risk loss and its location
is also based on the pip risk for the trade.
So, for example, if you buy a EUR/USD pair
at $1.2151 and set a stop-loss at $1.2141, you
are risking 10 pips.
o Pip risk varies based on volatility or
strategy. Sometimes a trade may have five
pips of risk, and another trade may have 15
pips of risk.
entry point and your stop-loss location. You
want your stop-loss as close to your entry
point as possible, but not so close that the
trade is stopped before the move you're
expecting occurs.

o Once you know how far away your entry

point is from your stop loss, in pips, the next
step is to calculate the pip value based on
the lot size.

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 Position sizing

Understand Pip Value for a Trade

o If you're trading a currency pair in which the U.S. dollar is the second currency, called the
quote currency, and your trading account is funded with dollars, the pip values for different
sizes of lots are fixed. For a micro lot, the pip value is $0.10. For a mini lot, it's $1. And for a
standard lot, it's $10.

o If your trading account is funded with dollars and the quote currency in the pair you're
trading isn't the U.S. dollar, you will have to multiply the pip values by the exchange rate for
the dollar vs. the quote currency. Let's say you're trading the euro/British pound
(EUR/GBP) pair, and the USD/GBP pair is trading at $1.2219.

o For a micro lot of EUR/GBP, the pip value would be $0.12 ($0.10 * $1.2219)

o For a mini lot, it would be $1.22 ($1 * $1.2219)

o For a standard lot, it would be $12.22 ($10 * $1.2219)

o The only thing left to calculate now is the position size.

Determine Position Size for a Trade

o The ideal position size can be calculated using the formula:

ACCOUNT BALANCE X %RISK PER TRADE

POSITION SIZE =
STOP LOSS DISTANCE X $VALUE PER STANDARD LOT

o In the above formula, the position size is the number of lots traded.

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 Position sizing

o Let's assume you have a $10,000 account and you risk 1% of your account on each trade. Thus
your maximum amount to risk is $100 per trade. You're trading the EUR/USD pair, and you
decide to buy at $1.3051 and place a stop loss at $1.3041. That means you're putting 10 pips at
risk ($1.3051 – $1.3041 = $0.001). Since you've been trading in mini lots, each pip movement
has a value of $1.

o If you plug those numbers in the formula, you get:

Lot size = ($10000 x 1%) / (10 x 1)

= 1 standard lot
o Since 10 mini lots are equal to one standard lot, you could buy either 10 minis or one standard.

o With this formula in mind along with the 1% rule, you're well equipped to calculate the lot size
and position on your forex trades.

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 Risk to reward
ratio
o When you are trading Forex or any other o For example, you have randomly decided to set a
financial market, you are primarily engaged in
the business of taking risks in order to gain
rewards.
o Basically, calculating the risk reward ratio
quantifies the amount of money you are willing
to risk to make a certain degree of profit from a o On the other hand, if your trading strategy is
particular trade.
o If you are novice trader, then you might have the
experience of initially making some consistent
profits, only to have that one bad trade, which
eventually wipes out all the profits from those
earlier profitable trades.
o This phenomenon is not very uncommon among
inexperienced Forex traders because they do not
understand the importance of Forex risk
management.
o The key to becoming successful as a Forex
trader is to find the right balance between how
much you risk per trade to achieve the desired
profit you are aiming for. Furthermore, this
balance needs to be realistic and relevant to the
technical strategy you are applying.
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profit target three times your initial stop loss, a
risk to reward ratio of 1:3. But, what if your
strategy is not capable of delivering such a risk
to reward ratio in the long run? In that case, you
will eventually lose money.
capable of delivering trades with a 1:5 risk to
reward ratio, but you usually close the trade
once your profit reaches only two times of your
initial stop loss, then you are always leaving
money on the table.
o Hence, you should spend a lot of time back
testing your strategy and try to find out the
realistic average profit your trading strategy
makes on each trade relative to the stop loss it
requires.
o Only then can you can properly understand the
relationship between risk and reward and
successfully conduct a forex risk reward analysis
for your particular trading strategy.
 Risk to reward
ratio

How to Calculate Risk to Reward Ratio

o The formula for computing risk vs. reward o
ratio is relatively straightforward. If you risk
50 pips on a trade and you set a profit target
of 100 pips, then your effective risk to
reward ratio for the trade would be 1:2:
For example, if you are a scalper who likes
to risk a maximum of five pips per trade and
aim to gain around ten pips from each of
your trades, and think you are achieving a
1:2 risk to reward ratio, then think again!

o Your risk (50 pips) for a reward (100 pips)
would equal: 1:2 risk reward ratio.
o Also in real trading, you need to consider
the spread charged by your Forex broker to
conduct the risk and reward analysis
effectively. If you do not pay attention to the
spread, you will end up using a risk to
reward ratio for your trades that is not
completely accurate.
o If your broker charges 2 pips spread on
EURUSD, then you are effectively risking (5
+ 2 =) 7 pips to make (10 – 2 =) 8 pips of
profit, which means your net risk to reward
ratio in reality is only 1: 1.14 not 1:2 which
you incorrectly assumed because you did
not take into account the transaction costs.

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 Risk to reward
ratio
Impact of Win Rate on Risk to Reward Ratio.
o Aside from understanding the overall risk to
reward ratio of your trading strategy, you also
need to figure out the impact of win rate, which
is an integral part of the risk to reward ratio
analysis.
o If you already know the historical risk to reward
ratio of your trading strategy from back testing, o If you already know the win rate of your system
there is a simple formula you can apply to figure
out what kind of win rate you will need to
maintain to remain profitable in the long run.
o Required Win Rate = 1 ÷ (1 + Historical Risk to
Reward Ratio of Your Trading Strategy)
o For example, if you know that your trading
strategy has an expected risk to reward ratio of
1:1 from extensive back testing, then plugging
this into the formula would yield the following
outcome:
1 ÷ (1 + 1) = 0.5, which is 50%.
o So, you need to maintain at least 50% win rate in
order just to break even. With this trading
strategy, if you maintain a 55% win rate, you
should be profitable in the long run. But, if your
win rate comes down to even 49%, you can be
confident that this trading strategy will become
suffer, meaning regardless of short-term
performance, in the long run, you will lose
money.
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o However, if your trading strategy has a win rate
of only 50%, but it can deliver a risk to reward
ratio of 1:2 on a consistent basis, you would end
up making a 50% return on your investment just
by risking 1% of your capital in a series of 100
trades.
from extensive back testing, but yet to figure out
what kind of risk to reward ratio you will require
to remain profitable in the long run, then you
can apply another formula to find out the
necessary risk to reward ratio.
o Required Minimum Risk to Reward Ratio = (1 ÷
Historical Win Rate of Your Trading Strategy)- 1
o For example, if you know that the historical win
rate of your trading strategy is 40%, then
plugging this into the formula would yield the
following outcome:
(1 ÷ 0.4) – 1 = 1.5
o So, to remain profitable in the long run with this
trading strategy, you need to maintain a risk to
reward ratio of at least 1:1.5, which means for
example that if you set a stop loss of 100 pips,
your profit target should be at least 150 pips.
o As you can see by now, the win rate of your
trading strategy plays a vital role in the overall
risk reward equation.
Risk to reward
ratio

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 R AND R - MULTIPLES

o Before you can effectively apply position sizing o In terms of price, R is the point at which you
plan to get out of your position in order to
strategies, you must understand the principles preserve your capital.
of R and R –multiples.
o It’s the place where your rules say the reward
to risk ratio will not be profitable on this trade,
o R stands for the initial risk you take on any
and it’s better to exit now rather than lose
trade when you enter the market.
more.
o The initial risk is the amount that you are
o Your R – multiple is simply the amount that
willing to lose on the trade in order to achieve
you profited or lost in terms of your initial risk.
a profit. It can be expressed in percentage of
account size (e.g. 1%) or the dollar amount
o The principle of cutting your losses short (so
(e.g. $50) that you lose when the price hits
you will have small R – multiple losses) and
your stop loss
letting your profits run (so you will have big R
– multiple gains) is critical for profitable
trading.

o Your losses should have an R – multiple

between 0R and – 1R and your profits bigger
than +1R.

o For example, you go long 0.1 lot on EURUSD with 100 pip stop loss. Unfortunately, the
price moves against you, hits your stop loss and you lose $100. That $100 is your initial
risk or 1R. You can say you just lost 1R.

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 R AND R - MULTIPLES

o Now, all profits and losses can be expressed as a multiple of the initial risk R. That multiple is
called the R- multiple. You want your losses to be 1R or less and your profits to be as big as
possible.

o Let’s go back to our EURUSD example and let’s say you saw that the price was going against you
and cut your losses half – way towards your stop loss.

o You have only lost $50 now instead of the full $100 of your stop loss. To express this as a multiple
of your initial risk (or R), we can do the following:

Initial risk (or 1R) = $100, Loss = -$50

R – multiple = Profit or loss / initial risk
= -$50/$100
= - 0.5R

o The R – multiple on this trade is a loss of – 0.5R.

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 R AND R - MULTIPLES

o Let’s look at another scenario on this trade where we take profits at the highs.

o We ended up with a profit of $128. Again, We can calculate our R – multiple as a multiple of
the initial risk ( or R):

Initial risk (or 1R) = $100 , Profit = $128

R – multiple = Profit or loss / initial risk
= $128/$100
= 1.28R

o We just made 1.28R on this trade.

o Since we can express the result of every trade as its R – multiple value, it also becomes easy to
calculate the R – multiple sum of many trades. Imagine that you had 5 trades last week:

• Trade 1 (loss): -0.2R

• Trade 2 (Win): +3.2R
• Trade 3 (Win): +0.9R
• Trade 4 (loss): -1.0R
• Trade 5 (break-even): 0.0R

o By adding up the above values, we can then say that our total R – multiple for this week was
+2.94R. This one number represents how our performance was for that week, not just in terms
of profits or losses made, but also in terms of how much risk we had to take for this. It’s a much
more accurate way of evaluating performance than just pips or ticks.

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 TRADING
EXPECTANCY

o Whether you are seeking to earn a side income or interested in pursuing trading as a full-time career,
the Forex market offers many advantages over traditional financial markets.

o One of the biggest benefits is that the currency market offers traders the opportunity to earn big
bucks even when starting with limited capital.

o It’s important to keep in mind that currency trading is a zero-sum game. In other words, for someone
to make a profit on a position, there must be an opposing party that bears that loss.

o As such, due to the zero sum nature of the currency markets, there will be a certain percentage of
Forex market traders that are in the green, or have a positive return on investment, while a certain
percentage will be in the red, or have a negative return on investment.

Projecting Your Forex Annual Return

o The key to earning consistent returns from o
your trading activities is to know your
edge inside and out.
o In other words, whether you are
a discretionary trader or a system trader, o
you need to have a solid understanding of
your trading strategy metrics.
o This includes knowing what your average
win percentage is, along with stats such as
number of trades per week or month,
average win amount, average loss amount,
maximum drawdown, profit factor, per o This can go a long way to building
trade expectancy, consecutive winning
trades, consecutive losing trades, and
more.
Firstly, by becoming intimately familiar
with the performance metrics of your
trading strategy, you will gain more
confidence in the strategy.
For example, if you are currently
experiencing a 20% drawdown, but you
know that the maximum drawdown for
your strategy is 30%, then you will find
comfort in knowing that the current equity
drawdown is within your maximum
expected range.
confidence in your strategy and executing
trades even when it feels difficult to do so.

o There are two important reasons why it’s

imperative that you understand your trade
metrics.

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 TRADING
EXPECTANCY

o Secondly, you should have a firm grasp on your trade metrics because it will provide you
insights into what you can expect to make on a per trade basis, a monthly basis, or
annualized basis.

o For example, your trade expectancy is a very important figure that tells you what the
average profit per trade will be, assuming that your strategy is a profitable one.

o And so, if you know that your trade expectancy is $25 per trade, then this will allow you to
extrapolate many other return related figures.

o So based on this if you find that on average you are executing 20 trades per month, then
you will know that your average expected monthly profit should be around $500. This is
calculated by multiplying your trade expectancy of $25 by the number of trades, 20, per
month resulting in the $500 expected monthly profit figure.

o Expanding on this, this would result in an expected yearly profit of $6000. If your account
size averaged $ 15,000, then the yearly return would be 40%. Can you see the power of
knowing these key metrics, and how it can help you figure out what your expected Forex
trading returns is likely to be.

o Again, if you want to project what you can realistically make trading your specific Forex
strategy you should start by knowing the trade expectancy of your strategy. Here is
the formula for calculating trade expectancy:
Trade Expectancy = (Win % x Average Win Size) – (Loss % x Average Loss Size)

o Let’s run through a quick example using the formula above. Assume that your strategy has
an average win percentage of 50%, and your average win amount is $400, while your
average loss amount is $300. So if we plug those numbers into the trade expectancy
formula above we get the following:

o (.50 x $ 400) – (.50 x 300) = $50

o As such, the Trade Expectancy equals $50.

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 TRADING
PERFORMANCE

o As in any business venture that you engage in, the ultimate success of that business will
rely heavily on your understanding of various data points and financial figures. And
that is certainly true as it relates to trading in the financial markets.

o Successful traders know that they need to track their trading performance on a regular
basis so that they can continually improve the process to stay ahead of the curve.

o But what exactly does that mean? Well, trading performance tracking refers to the
process by which a trader can monitor, and evaluate various metrics related to their
trade executions in an effort to optimize for better results.

o As with most data-driven approaches, it’s often said that what gets measured gets
improved. And so, while some amateur traders consider the whole process of trade
evaluation as an unnecessary tedious endeavor, professional traders have come to
realize that it is one of the key ingredients to their trading success.

Achieving Peak Performance In Trading
o Getting in and staying in a high performance
trading mindset is essential to becoming a
better, more consistent trader.
o As traders, we are in the business of trading
o Most traders are just fine dealing with
winning trades, however they have some
emotional issues when it comes to losing
trades. And this is particularly true for
novice traders.
o One of the best ways to deal with this
mental obstacle so that it does not adversely o
affect our decision-making capabilities in
the market is to start thinking about trading
gains as revenue, and trading losses as
expenses. It sounds ridiculously simple,
however the implications can be profound.
o Think about it for a second. If you own a
pizza shop, would you feel emotionally
drained or have negatively charged feelings,
every time you had to pay your monthly rent
to your landlord? Probably not, because as a
business owner, you would understand that
paying rent is a cost of doing business. And
as such, it is a necessary expense, and not
something to get overly emotional about.
the markets. And so, the gains that we
realize on certain trades are actually
revenue, and the losses that we realize on
other trades are actually expenses. And so,
we must make an effort to think in these
terms.
Not only will this have the positive effect of
your treating your trading as a real business,
but also, it will go a long way towards
neutralizing the negatively charged
emotions that you feel with each and every
losing trade.

FOREX BULLS