“Will Losses of 70, 90, 42 and 39 Pips Nearly Wipe Out Your Account?”
A prospective trader questioned after he saw the forex signals track record with four consecutive losses of 70, 90, 42 and 39 pips.
His question went like this: “Hello Steven, your overall trade results look good but, for example on week of August 16th 2010, you had four consecutive losses of 70, 90, 42, and 39 pips. Won’t that trigger a margin call or nearly wipe out my account?”
My reply: Whoa buddy! Slow down. I am sorry, but what you’re doing does not even come close to resemble actual trading. Please forgive me, but I’m going to be a little harsh here.
If what you are suggesting is true, then you are definitely gambling. If losses of 70, 90, 42, 39 pips can wipe out your account, you are using WAY TO MUCH leverage. Stop it now and take this business seriously! If you want to gamble, then go to Las Vegas and get it out your system.
Come back to trading when you are ready to make reasonable returns of 60-100% per year. Not 60-100% weekly!! It ain’t gonna happen!
Keep in mind that the best professional traders, those that are the cream-of-the-crop, the very best-of-the-best, the most elite traders in the world are accomplishing 3-8% per month, so why are you aiming for 3-8% per day? Are you a better trader then these seasoned hotshots? No way Jose!! Yes, you may hit an occasional home-run by swinging for the fences and those winners will fill like you just hit the jackpot, but this is not trading man.
Let’s take trading seriously. The first order of business is capital preservation. You must protect your trading account. Your trading account is the life-blood of your career. It is what keeps you in business. Respect your account like no other.
Structure your leverage and trade size so that if you had losses of 70, 92, 42, 39 pips, your account draw-down would not exceed 3-4%… maximum! Yes, you got it right. I am saying that a loss of 243 pips should only make a slight dent in your trading account that should never exceed 4% of your account size.
What I am saying is critical to your trading career. It is important that you understand exactly what I am saying here.
Do you want to make a living from your trading, or do you want to gamble occasionally and continuously fund your account each time you blow it up?
The choice is yours, but I can only help you if you are serious about improving your trading career with the forex trading signals and education can benefit you, but only if you are ready to trade like a pro.
Let’s recap: If drawdowns of 250 pips are scaring you, what about 600 pips that we may possibly see at with the forex signals? Nobody likes these draw-downs. I hate them. You hate them, but they happen to even the best of traders. Trading is streaky like that. Even at a 600 pip drawdown, your account should drop only 6%. Absolutely no more t