So many forex traders have a bad habit of jumping around from one method to another, and it’s a road that you need to get off of sooner than later.
I’d like to share a story with you that will illustrate the value of staying focused on ONE strategy and NOT deviating, using impeccable risk management, and using a trading approach with very good reward to risk.
As you may know, I’m a personal coach for those wishing to learn how to trade the forex markets, and several years ago I did a coaching session with a client who had been suffering through the same things that afflict most traders—lack of consistency, poor money management, poor trade management, and on and on. I’m sure you know the story.
During our coaching session I showed him an approach to trading using MACD divergence, but qualified in a specific way. MACD divergence can be a great trading tool, but in my experience, you need to be a little selective about using it. In other words, you don’t want to trade off of this pattern at any old place. Specifically, you’ll find it most effective to initiate a trade when MACD is diverging at a key level in the market.
In addition to learning this forex technical trading pattern, we also spent a lot of time on risk management. Risk management means both money management (or account management) and trade management. I’ll give you a great piece of advice: understanding risk management is more important than your trading method.
Most people spend a tremendous amount of time searching for that system that “never” loses money, and when they think they’ve found it, they are very willing to throw excessive money at it (way over-leveraging) and inevitably end up blowing out their account (or multiple accounts).
The client I was working with made a total commitment to adhere to both the MACD divergence trading methodology, and most importantly, to the risk management that I told him would keep him in the game, even during streaks of losses. Psychologically, making this kind of an unwavering commitment is one of the most difficult, yet crucial things for a trader to do. But….all the consistently successful traders have done it.
So how did the story end? Well it ended the way I knew it would if he would stay committed, which he did. During the past 14 months, he has never risked more than 1% of his account on a trade, and yet he has returned just over 100% in his account.
The best part is, I recruited him to be one of the moderators in our LiveConnect service, and all he does is watch for qualified MACD divergence trades and alerts members when they set up! In addition to working with us, thanks to the outstanding statistics on his trading he has now been asked to manage money for a fund. Gotta love it!
I absolutely love seeing people turn the corner to the positive in their forex trading, and to be involved in helping them do that is nothing but a complete thrill for me. I hope you found this story inspirational too!
All the best!
Vic Noble
**To learn more about forex trading and how I teach, I have a FREE e-Book, plus 7 great videos on key trading concepts that I believe will genuinely help you. No obligation, just good useful information!
http://www.forextradingandeducation.com/wp/free-fx-training/