So my masters started (part 1)

Hi Guys and Girls,

It's been two and a half weeks since I last posted **hangs head in shame**.

I'm doing my masters in Sport Management. So now I DJ, play basketball, do a masters, and study Forex trading. This has left me a bit all over the shop recently, but I've managed to work out a schedule (like a good student) and I will be posting at least twice a week now.

So where were we? I've spoken about how I've managed to turn a scam into an interest in my last two posts:

here, and here

Although I'm not trying to sell a product to anyone, I understand that people need evidence to 'buy' into the idea that trading can be profitable. So, I'm going to first discuss the importance of risk management. In part two, I'll show good risk management, and also give you an example of a profitable trade that I made. So keep reading please!

Let's make up a scenario...

When you are trading, if a trade is going against you (or in your favour) you can close it at any time to stop your loss/secure profits. Now imagine you have £1000 to your name, but you have been given some information that leads you to open up a trade. You are CERTAIN that this trade is going to be hugely profitable for you, so sure in fact that that you decide to use all of your £1000 in this trade. You hope to make an additional £1000 in this trade, which is going to pay for that holiday to Miami you and you're mandem  have been looking forward to. You've already pictured your arrival at South Beach:

If you don't know this song, what's wrong with you?! 

Now it get's interesting...

When you open your trade, the market instantly moves against you, and you are at a loss - lets say £100. Not what you expected, but you believe the market to rally in your direction, so you leave your trade open. Anyway, you've only lost £100 - so it's all good right? WRONG!

Another sudden, and significant drop, and you are instantly down £400 - you are definitely sweating now. This wasn't supposed to happen. Why is this happening? You begin to pray. Hard. Surely the market can't continue to go in the opposite direction to the one you anticipated? Having made this stupid hopeful decision, you leave the trade open longer, and yes, the market moves completely against you. You are now down £1000, and you're trade is closed. You have lost everything!

Instead of Miami with the mandem you are going to spend summer in Mitcham with Mummy.

See your life?

Sound drastic? This is actually what wipes out 90% of Forex traders before they get properly started, and it tends to scare them off for life. What they fail to realise is that they weren't trading, they were GAMBLING.

Lesson? Traders protect themselves from large losses, and make small consistent profits. Gamblers risk everything hoping for one massive pay day. All their emotion goes into the market. They are 100% invested financially and emotionally in the market.

I'll show you what a trader does in the next post.

Thanks for reading, please share my work!

Jr

twitter.com/jr_dot