So, you read somewhere or heard someone talking about how forex trading has changed their lives. And you've decided to do some research to see whether it can be a viable lucrature for you.
Don't worry, I was also like that a few years ago. Had a friend I was working with and he introduced me to this online money making opportunity which I had no idea about. He told me I could invest $100 and turn my life around in the next few months......hehe... you read that right... and you're wondering how could this be possible. Don't worry.. read on the next...
So, this friend of mine showed me his Exness account. He was a big player making atleast $50 a day. Sounds little
!!!!.... yes.. this was a lot of money given that we were working for $42 a day working 8hrs. And for him, this was a good supplementary income to add onto his monthly wage.
So, I got hooked up and also opened up an account with Exness broker and deposited my $100.
I started playing with the charts... buying and selling.. looked fun until I saw my account getting blown up by just a single trade. 😬😬.... I felt irritated seeing my $100 getting swooped away. I had to make research and learn how this business really works. So, I got to learn from many YouTube videos, bought online courses and read different pdf books teaching about forex.... yes they helped me and I upped up my game.
What these all were emphasising was to have a well scheduled trading plan, a strategy and proper risk management.
Before, I could go all in with bigger lot sizes coz I wanted to make a fortune within the shortest time possible, never did I know that gluttony never leave longer.
So, I learnt that for any account I get, I should always risk 1% per trade with a good risk to reward ratio.. that's where the 1:2 comes in.
I risk 1% of my account to make 2%. To put this clear, for any $100 account, you should risk losing $1 to make $2 per trade.
The reward can differ depending on your setup. You can have a reward of 2, 3, 4, 5.....and so on... but always your risk shouldn't go above 1% if at all you don't want to blow up your account.
This is because, incase you place 5 trades and you lose 3 trades and win 2 trades...the 3 trades you've lost will account for $3 on a $100 account.. Where's the 2 trades won will give you $4 and end close the day with a $1 in profit.... given that you had a 1:2 risk to reward ration.
Also before starting up your trading day or session, look up to the economic calendar first before placing in your trade. Coz you might have a good technical setup get ruined by the news release(fundamentals). So, it's always advisable, if you're a technical trader, to always look up into the calendar before placing your trade.
If you want to start forex today, my recommended broker is Exness. This is because they have tight spreads which help you to even trade and grow your $10 account with them.