Risk Percentage

Regardless of how good of a system you are using, it will not be profitable unless you are using money management rules. Before getting involved with a live account, you need to set up some rules that you can follow for every trade. Many professional traders use a rule that they will only risk a certain percentage of their account on any given trade.

For example, you may decide to risk a maximum of 2 percent of your account balance on any given trade. If you have a $10,000 account, this means that you will only risk a maximum of $200 on any single trade.

Making the Calculation

Even though you may understand that you can only risk a certain percentage of your account on each trade, you may not know how to go about calculating this on each trade. In Forex, you have to place a trade with the appropriate lot size to ensure that you only risk a certain percent of your account.

You can use one of the many Forex position size calculators available online for this process. With a Forex calculator, you will enter the size of your account, the percentage of risk that you want to use, the currency pair that you are trading and the current market rate of each currency. The calculator will then tell you the exact lot size that you need to include in your trade to risk the appropriate amount. It may also compute the number of dollars that you are risking with this trade.

Sticking to the Rules

Setting up some rules for your trading is a great idea and it can pay big dividends for you in the future. However, if you cannot stick to the plan that you set forth, it will not do you much good. You need to be able to stick to the rules at all times.

Many people who set up trading rules get tempted to risk more of their account after winning a few trades in a row. You might think that trading is easy and you are more likely to win. In this situation, you should resist the temptation to increase your risk and stick with the rules. 
If after a certain amount time, like several months, you feel like you could increase the risk, then you can make that decision. Just do not rush into increasing the risk after a few good trades.

Wow… that was something, wasn’t it? I don’t know about you… but in my eyes… Bob proved beyond any doubt he knows what he’s doing. He not only talks the talk… he walks the walk. And I think you’ll agree that’s pretty rare in the Forex industry. After all… CNBC, Fox Biz and Bloomberg don’t just pick some random Joe off the street when they want to do a finance segment.

They go to the guys who are the best of the best… who have proven time and time again they have what it takes to make a killing in the markets. And with over two hundred media appearances to his name… Bob’s certainly got an impressive track record.

In fact… just the other day I was thinking how much I wished I could trade like Bob does… using seventeen years of in-the-trenches experience to assert complete authority over the Forex market…

…and reap the profits.

If you’ve ever done the same… you’ll understand why I’m so excited. Because today… Bob’s launching Trader Swiper.. allowing us to do just that.

==> Visit Trader Swiper Official Website

All we have to do is copy the trades Bob gives us and watch as Bob’s decades of experience go to work for OUR accounts… putting profit in OUR pockets.

It’s like a How-To guide on building a Forex business…giving you the opportunity to receive Bob’s trade calls directly to your computer without the need to be a market wizard or techie nerd!

…it also gives you a real-time look at how a veteran trader tears profits out of the market.

Now… I could talk about Trader Swiper all day…

…but it’s probably better if you hear more about this straight from the horse’s mouth.

Here’s the link:

==> Visit Trader Swiper Official Website

Check it out… I honestly believe it’s one the best Forex products ever to hit the market.

Bob is only accepting a limited number of new members into his program… so I strongly encourage ou to check this out ASAP. Given Bob’s reputation, and the kind of results he’s achieved with his current members… I don’t expect this to stay open for long at all.

Trader Swiper is an automated trade copier signal service. So any trade that Bob makes is automatically copied to your computer and trading charts.
You don’t have to sit in front of your computer all day watching for the next trade to appear. You can relax knowing that the trades that are worth entering are being made automatically.

The Australian Dollar has been particularly bearish at the start of 2011 and uncharacteristically so, due to the natural disaster that is the Queensland floods and whilst this continues it seems the AUD continues to struggle in general. The Euro also had a bad start to 2011 with speculation that Spain and Portugal were in a fairly imminent need of a bailout, but as these fears have now been allayed (at least in the short term) from Bond Sales – where is the currency pair headed throughout 2011?

The Davos summit came to a head this weekend with news, in particular for the Euro that has continued to buoy the Single Currency. For anyone that is unaware of the summit – it is the annual meeting of anyone and everyone who weighs in with any real say on the world economy, prime ministers, treasurers and heads of large banks and finance organisations.

But what is the main message coming out of the Summit? Well dispite many mixed messages (as you’d expect with so many huge ego’s trying to make politically enhancing statements), the most echoed statement from the Summit has been regarding the struggling Eurozone. With so many countries at risk in the zone and talk of a North / South divide as well as more stable economies (such as Germany) reported to be wanting away, the Euro had understandably struggled in early January. These concerns gained further credit when German Chancellor Angela Merkel dismissed a Euro bond out of hand, which would have increased stability to the Single Currency. So the bearish Euro faced turmoil square on and rates suffered as a result against the majority of major currencies.

However whilst the Euro’s prospects didn’t look great the floods continued to spread across Queensland, into Victoria and have showed little signs of completely subsiding. This meant that the Euro held ground as European(s) and Australian economies looked equally unattractive for investment. Interestingly as Australian inflation increased throughout January the Euro really began to pick up strength in the Short term as Sarkozy (the French PM) stated over the weekend: “Never will we turn our backs on the Euro. Never will we abandon the Euro.” Along with the bond sale and these messages of support have continued to make the Euro (seemingly at least) a more sustainable prospect. At the start of the year the AUD could buy 0.76585 Euros – which with the floods and Davos has now dropped to 0.72989, a difference of nearly 5%! This is a difference of over 7,000 Euros on a AUD 200,000 transfer!

Looking forward at the more medium / long term and putting my neck on the line I would expect the Euro to continue to gain against a bearish AUD in the next week or two. If you have a short term requirement to buy Euros from Australian Dollars perhaps it is best to look sooner rather than later, however if we are looking further into the long term the Australian economy remains stronger as a whole than the comibination of European economies (despite the floods), which has not escaped all it’s difficulties in my opinion. I could see the AUD / EUR rate ending the week at sub 0.72 levels but ending the year at 0.80 or better. If you have a requirement for AUD / EURs please feel free to contact me via email or phone and I will be more than happy to help you discuss what may impact your transfer.

One very good trend that I’m seeing this earnings season is a strong resurgence in business conditions among small-cap technology companies. This strength is occurring in the semiconductor industry as well as in the networking and telecommunication sectors. It’s a good sign for the domestic economy and business outlooks are improving.

Because the stock market’s been so strong lately, most of the small-cap technology companies that are reporting good news have already experienced major upward price moves in their shares. There isn’t a lot of value out there and this makes life a lot more difficult for stock-pickers. Most of the trades in the marketplace now are momentum trades and, while this kind of action can be profitable, you have to be ready to jump ship at any time. Momentum investing isn’t easy.

Many analysts, including myself, expected the technology sector as a whole to do much better than it did last year. The recovery in corporate IT spending definitely took longer than most people thought, even though big companies have been sitting on piles of cash. With corporations now spending on equipment and services, and consumers buying at the retail level, there’s a trickle-down effect taking place and it’s great for the small-cap technology sector.

But again, I come back to the investor’s view. Business is getting better and that’s great. But, where are the good investment opportunities? Where can I buy low with the goal of selling higher? The answer is that you can’t very easily in this market. We’re not in a new bull market. This is a bear market rally.

So, I want to reiterate a previous point about playing the market rather than playing individual stocks. In this kind of environment, with the current outlook and current monetary policy, trading the market seems to me like a worthier strategy than trying to pick individual stocks. Sure, there are great stocks out there to own, but I’m saying that the probability of generating successful returns now favors buying and selling the market, rather than individual stocks, which, for the most part, have already gone up in price.

I’ve been saying for months that investors should be long and I maintain this positive outlook for the near term. Investors want to be buyers in this market, because there’s nothing else to invest in and there’s a lot of hope for the future. The stock market is definitely due for a correction, however, so keep this in mind if you’re buying and selling.

If you have not seen the two videos I published last week from Todd Mitchell, here they are for your viewing.

The responses to these videos have been fantastic, (602 responses and counting!)…

==> Watch The 3 POWERFUL Price Bar Patterns Now

==> Click Here NOW: SEE “Truth About FOREX Trends”

Since sending these to content-filled presentation, many want to know even more about how Todd trades.

Thus the Webinar on Wednesday, taking you deeper into Todd’s thinking, held by Todd himself…

==> Click Here NOW: Register for Todd’s Complimentary Webinar

In this epic event, you’ll discover:

• An Underground Trading Strategy for Getting More Pips out of the Forex!
• 3 Powerful Price Patterns You See Everyday … And Don’t Know How to Trade! And, Get 2 More Criteria for Boosting Profitability and Predictability!
• Little-Known (Yet Critically Important) Techniques for Stacking the Odds in Your Favor By Keeping the Trend Your Friend!
• Discover a Unique Approach for Accurately Pinpointing An Uptrend, Downtrend and Sideways Market That Works No Matter What Market Your Trading!
• AND, much, much more (including a Q&A session)!

Since 1994, Todd has mentored over 6,000 students ranging from professional traders, million dollar market makers … to everyday people who are learning how to trade.

With literally HUNDREDS of life-changing testimonials from around the world, the results of Todd’s ability to help you become a better trader is astounding!

You do NOT want to miss this eye-opening event!

The webinar is being held on Wednesday, February 2nd at 8:00pm EST!

If  you trade FOREX… actually if you trade ANY market, take a look…