That is when I became obsessed with finding the right signal strategy for trading. I concentrated all my efforts on finding the truth.
Everything changed when I met a trader who opened my eyes and mind to the world of trading. This trader gave me a new lease on life. Many people think trading is complex and boring, but if you take the time to learn it, you will find it quite interesting.
Forex Money management strategy consists of important rules that help you maximize your profits, minimize your losses, and increase your trading account.
Money management refers to how you manage your money when you trade in the market. Without a suitable money management strategy, you can’t become a profitable trader.
While the benefits of these techniques are pretty easy to understand, Forex traders tend to neglect even basic money management rules and end up blowing their accounts.
Money management techniques ensure that the trader can trade again no matter what happens.
In the article, we will demonstrate a simple and proven management strategy that will help you profit and grow as a forex trader.
The trader that I had come across was trading a simple money management strategy that was quite common. He showed me two years of his equity curve, which identified when he was up and down on his balance and the point in time when he made a decision that changed his life. The result of that decision was an exponential solid upward curve, which fascinated me.
I couldn’t believe that his decision was so simple yet had made such a massive impact. Learning that someone could do something so simple was embarrassing, and I felt frustrated with myself for not thinking along the same lines.
The decision he made was a self-agreement contract that he did with himself, which had the following details:
His decision yielded astonishing results: The trader had over 85% winning days. The great thing was that in only three years, he had grown his account from 500 Euros to six figures, and that was after routine withdrawals were made!
Those aren’t just good numbers—they are stunning numbers! I couldn’t believe that someone could achieve growth that fast, and it was only possible by staying humble.
This revelation was a game-changing for me, so I decided to do the same. I implemented his strategy into my new trading. I will share those results with you today.
First, my analysis took a completely different path from the trader’s. I kept changing my analysis and repeatedly refined my entries. Simplicity was key, as I only took the lower-hanging fruits. Keeping things simple meant that the rewards at the end of the day were satisfactory.
One of the biggest mistakes traders tend to make is setting goals too high. They don’t realize that by doing so, they are setting themselves up for failure.
When you start your forex trading career, you will come across a lot of material. It will teach you how to make money fast and how easily this career path is going to be. However, the one thing that you will not find in any sophisticated article or in the many books on trading is how you should target the lower-hanging fruits on the tree.
I learned that lesson from the trader, who taught me that by keeping things simple, you don’t complicate your own trading strategy or try to aim for too high a prize.
The most important thing that you must remember as a forex trader is that you must try to achieve consistency in the results. Now, this doesn’t mean consistently failing. We are talking about achieving winning consistency here. I am assuming that everyone who is involved in forex trading has a good grasp of basic math. If you do the arithmetic, you will realize how powerful a money management strategy targeting the lower-hanging fruits really is for trading.
To make my point and prove it to you, I will show you the results. We will be taking the same decisions that the trader had made and, in the end, come out with two possible outcomes. The first result would be that we have managed to gain 85% winning days. The second result will be that we have lost. So, this is what we are going to do with our trading:
I will also break down difficult terms so that anyone who isn’t familiar with forex trading can properly understand what we are trying to achieve here. For instance, 15 pips for a major forex vehicle is approximately 18% to 10% of the daily range.
The complete zigzag path, based on the M15 timeframe, represents only approximately 1% to 5% of the daily pips movement available.
Therefore, if you are confused about what low-hanging fruit is in forex trading, it is the achievement of 15 daily pips.
The graph below is for reference, where we are implementing our strategy. Remember that the end result we are going for is low-hanging fruit, which is 15 daily pips.
This graph shows the results of the past 12 months. Using the strategy that we discussed above, we have managed to make over 35,000 Euros. That is an astounding 3500% growth! It is an incredible growth rate.
the graph below verifies and acknowledges that growth.
After you have applied the strategies, the growth chart that you are looking at should resemble this. When you look at the percentages, you will notice that the figures of 3500% growth are accurate.
The realized equity chart would resemble this:
This graph shows that when you have a long sequence of losing streaks, you are only risking 1.5% of your daily value in trading.
Have you noticed how the graph chart never manages to reach the complete 100%?
Let’s say that the scenario has been exaggerated, but there is a constant risk, which means that you won’t manage to blow the account, and hence, there is a potential to recover from this loss.
If you apply the theory, then by doing simple math and maintaining disciplined behavior in trading, you will find that long sequences of losing strikes can be recovered as well. That is because when you achieve exponential growth on consecutive winning days, you can overcome those losses.
One of the main reasons why the current generation of forex traders fail to get winning results is because they want instant results and don’t want to sweat for rewards.
That was the thinking that I had as well when I dived into forex trading, not realizing that it was not the right strategy. The biggest revelation to me was that by keeping things simple and remaining humble about my expectations from the market, I managed to make amazing gains from the low-hanging fruits.
The sophisticated trading markets of today tend to confuse traders because they offer extremely high liquidity. All the brokers will be offering you leverage. However, they don’t tell you that the only way to find consistency in the market is to remain humble. There is a simple strategy at work here, and the best part is that everyone can take advantage of it.
“All you need to do is take your share of the pie fast, understand when you must end your daily, and leave for living your life.”
Over the course of my forex trading career, I must have met thousands of different traders. However, almost all of them are looking for instant success, which means that they don’t keep things simple. They are too focused on taking big risks to acquire bigger rewards.
That is why there is no reward for the instant generation. They aren’t willing to grind it out and take their losses on the chin. Too many traders give up at the first sign of trouble.
I will tell you from my own personal experience in forex trading that keeping things simple isn’t easy to reach by any stretch of the imagination because the market is so complex. However, once you manage to train yourself and start following your own checklist, you will start noticing that things are falling into place.
The secret to achieving success in forex trading is to keep things as simple as you can. It may seem like rocket science to you, but trust me. The only things you need to know are when you bank when to go home, and how much a losing day is going to cost you. However, don’t be disheartened by losses because, in forex trading, there is always the potential for a massive recovery. This is the simple concept behind achieving success in forex trading, and implementing it showed me great results.
There are so many traders who are bad at money management that it is almost comical, if not sad. This problem is caused by perception and complicating things that should be kept simple. I am going to change all that by showing you how to implement the lower-hanging fruit of money management inon your own strategy.
So, here is how it goes:
Over here, we will be discussing the main objective of the lower-hanging fruit money management strategy and the end result you should expect.
The market is always going to fluctuate, but always keep your eyes on the prize, and don’t be scared by the volatility. You must set a range profile, which means that you must know how much a single-day loss is going to cost you.
We already talked about keeping your eyes on the prize, and I am going to reaffirm that here. When you are focused on the gains you want to make, you will start seeing results that will take you toward the path of success.
One of the most important things you must look at in this forex money management strategy is to understand the risk element. Once you have knowledge of the risk you are taking, you will then manage to come up with the right strategy that will help you overcome that risk aspect.
Forex trading isn’t simple, which is something that every trader will tell you. It isn’t easy as well, because if it was, then everyone would be doing it. The rewards are big, but you will only manage to take advantage of them if you implement the right strategy.
One thing that a lot of novice traders don’t know is that the road to success in forex trading is money management. That is the golden grail because if you don’t know how to manage your losses, you will struggle to win big in forex trading.
To ensure that you win, you must keep the following in mind when implementing the strategy:
Always measure your performance by collecting statistics and checking up on them regularly.
Identify the key benefits of the strategy and keep tabs on them.
It is important you know about the challenges so that you can overcome them later.
Understand the growth potential because if you don’t manage your expectations, you will not manage to get the right results in forex trading.
Most novice traders don’t know that the road to success in forex trading is money management. Once you have knowledge of the risk you are taking, you will then manage to come up with the right strategy that will help you overcome that risk aspect.
you must try to achieve consistency in the results:
*Use the strategies of 15 pips, get flat at the daily target or after 3 entries, or at a total loss of 15 pips.
*remember, 15 pips are always equal to the money value of 1.5% of the account.
*Most importantly, keep things simple and remain humble about your expectations from the market. This is the only way you’ll manage to find consistency in the market.
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