By Boris Schlossberg @FXflow, CEO and founder BKForex
This is going to one of my shortest, but probably most important trading column ever. In all my years on Wall Street I have never, ever used this word before, but today I will. I can guarantee you a way to avoid every stupid, impulsive, account wrecking trade you have ever made from this point on.
Before I tell you how let me be clear. I am not saying I can stop you from losing money. I am just saying I can stop you from losing money in the stupid let-me-just-try-this-trade-because-I-am-bored-and-now-I-am-wrong-and-now-I-am-going-to-add-to-my-position-until-I-get-margined-out way that all retail traders lose their money.
How many times have you had great weeks, months, quarters only to squander it all away on an idiotic idea that made you fight the market in size too large until they carried you on stretcher? I’ve done that at least a dozen times in my career. And guess what? There is no way to prevent it.
But there is a way to control it.
Professionals on Wall Street always use a process when it comes to trading, which means that your entries, exits, sizing and any adjustments are all pre-planned and well established before you click the screen and place a trade. But as traders we are always going to be tempted by risk. Sometimes those ideas will pan out sometimes they won’t, but the unifying factor of all those trades is that they stand outside of your process and are therefore vulnerable to the possibility of ruin.
So here is my solution to controlling the non-process trade. One unit. The minimum trade. Yes for most of you on retail platforms that means .01 of a standard lot and 10 cents per pip. Here is the key point.
Click here to read the full article on BKforex