The times they are a changing

Well, it looks like the markets are starting to change, and we are starting to see EUR improve a little bit.

So we are still watching the EURGBP andadded to that a few more currencies. Nothing is going to be triggered anytime within the next day or so, but I am keeping my beady eye out for them when they do come.

I have been looking into my margin call requiremenets, and because I will only ever be looking to risk about 3% on each trade, I could quite happily have 10 open positions going to full loss at any time - this would be 30% of my capital lost, and I would still be very far away from ever receiveing that dreaded margin call.

Money management is key. Minimising your risk is the most important thing in Forex. It is not a case of getting into trades, it is a case of having money availbale to get into trades tomorrow. There is no point in trying to make lots of money. If you commit 100% of your money in each trade, regardless of how much mnoey you make, you will end up with zero. You may be absolutely correct in all your analysis, but the markets do not listen to your analysis!

Some sobering reading in that if you risk 50% of your bankroll and lose, you have to increase your bankroll by 100% to get to the point you started off at.

This is not a get rich quick scheme- that is proven by us not having loads of trades (I want to trade when the markets tell me I can, not when i want).

This is supposed to be striving for financial independence over the long term.

Some stats (based on the trade the other day)

If we started off with a bank of $500, after 10 trades of winning 3% (and compounding the wins to the next trade) You would have $682 - an increase of $182, or increasing your account by 35%.

However, after 20 trades, you would have $903, a profit of $403, that is an increase of 80%,

After 40 trades, you would have $1631, a massive increase of 262%.

This of course does not look at losing trades, however, a 3% increase per trade is well doable (as an average, considering that we increased our account by 4.4% on one trade, and the USDCAD trade we should have been in would have represented an increase of 6.6%!!!)

Hopefully this will give you some idea of just how powerful money management is, and that risking the house on a gamble is not neccesary to get big returns.

Happy trading!