How to Control the Forex Markets

Filed under: Learn Forex Trading |


Now, of course, the forex markets cannot be controlled – that you need to know from the very start. Nobody can control what the forex markets do, not unless you have an incredible amount of funds that might move the market (and I am talking bullions of dollars here!). However, there are a number of variable that you are in control in as a trader, and I would like to briefly discuss these controllable aspects of trading today.

 

Screen shot 2013-05-03 at 11.17.15To get straight to it, the things that you can control as a trader are your entry, your exit, and your risk levels. Everything else unfortunately is out of your control. Given these facts, then it makes sense to concentrate on your entry, exit, and risk levels, and do not even try to guess which way the market is going to go.

 

Our risk levels are easy enough to control. We just have to decide what our maximum risk level is on any one trade – and to stick to it. I personally never risk more than 1% of my bank on any one trade. This means that I can have 100 losers in a row before my bank blows up – and this is extremely unlikely to happen (it would be like tossing a coin and getting it wrong 100 times in a row!).

 

You might think that your entry is the most important variable, but studies have been done to show that it is the exit that is crucial, and that even a random entry, properly managed, can be profitable. Find a strategy that gives you an edge in the market, and tips the odds of probability in your favour, and then manage the trade by listening to what the narrative of the market tells you, and move stop losses up as appropriate as the trade moves in your favour. If you do all of this, then you have a good chance of being profitable in the forex markets.

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