| Forex Risk Management Calculator | | | | 7. Opening a mini account (still viewed as a practice |
| Lack of thorough Forex education can be costly. | | | | account) |
| Some new traders open a mini-account and | | | | 8. Strict risk management |
| immediately throw $5,000 at it, jump in and get their | | | | 9. Developing mental discipline and control of |
| feet wet. Within 3 months or less the account is | | | | emotions through experience |
| finished. | | | | Let's take a look at this list a little more closely. |
| What happened? | | | | Notice the items of lesser importance have to do |
| There is a lot of hype surrounding the Forex! The | | | | with the mechanics of trading. Most Forex education |
| internet is full of claims that you can turn a few | | | | packages spend ample time on the mechanics. |
| hundred dollars into tens of thousands within months | | | | But the most crucial aspects, the factors that can |
| or 1 or 2 years. | | | | make or break a Forex trader are the last two, |
| With the most rudimentary information, new traders | | | | items 8 and 9. Forex Risk Management Calculator |
| are sometimes encouraged to begin trading long | | | | Risk Management |
| before they are qualified. | | | | Forex education must include a detailed explanation |
| Regretfully, some get-rich-quick merchants merely | | | | of risk management rules to be of any value. |
| teach a little technical analysis and basic concepts in | | | | You need to know how to calculate risk reward |
| the Forex education they offer and miss what | | | | ratios and which trades your equity will allow and |
| amounts to the most crucial part of Forex education: | | | | which ones you need to avoid. |
| Mental and emotional discipline. Forex Risk | | | | Estimates vary as to what is the optimal risk |
| Management Calculator | | | | percentage on any one trade. Some very |
| Aspects Of Forex Education | | | | conservative traders may suggest no more than 1%. |
| So in brief, here is how the various aspects of a | | | | As a general rule, 2% seems to be a reasonable |
| thorough Forex education could be prioritized in | | | | figure allowing for a series of losing trades without |
| increasing order of importance: | | | | putting the account in jeopardy. |
| 1. Forex terminology and trading mechanics | | | | More liberal traders even suggest 5% but in my view |
| 2. Learning how to read charts | | | | that is dangerous. Image the hit on your mental |
| 3. Learning how to use the online trading software | | | | energies if you get 5 or 6 losing trades in a row if |
| 4. Learning a variety of technical indicators | | | | you trade with that kind of risk. |
| 5. Learning a handful of proven strategies employing | | | | An effective Forex education will devote a serious |
| those technical indicators | | | | amount of time to discussing risk management. |
| 6. Practicing in a demo account | | | | |