Why I Love Forex Trading & My 1:6 Risk Reward Ratio Trade
I have been trading forex since 2009 and one of the main reason I love trading forex is the freedom it gives me. As long as I have a computer plus internet connection, I could make money from trading anywhere I want.
Last Friday, I went to Indonesia for a 3D 2N short trip with my family.
Wherever I go and have the time to sit down and relax, I will take out my laptop and connect to the internet using the $5 SGD handphone 3GB data plan that I have bought in the local store.
I will start to look at the chart and look for trading opportunity. Due to the volatility of the market in recent period, I had some losing trades that are due to the spike in the price but after that, the price move in large movement in my traded direction.
I made good profit for my account during that one day of my vacation and I am glad to be able to make money for my students and users of my Forex Signal Service during my vacation.
Below is the screenshot of my account
(Click on the image to enlarge it)
You may see more red boxes but if you take a closed look at it, you will see that 9 of them are breakeven trades and not losing trades.
There are 2 things I want to emphasize here in this post
1) The importance of trust in a strategy
If you take a look at the screenshot or the video that I have recorded for you guys, you will see the trades that I have taken during last Friday.
There are a point where I get 4 consecutive losing trades in a row due to the volatility of the recent market. For some traders who do not have faith in the forex strategy they are using, they will stop trading and start to look for new strategy to use.
However I stick to my strategy like a glue and I eventually emerged as a winner. This is because I trust my strategy very much as I have been using them since 2009. Therefore I will urge all my students of my forex course to trust the strategies that I have taught you as well.
Stick to it like a glue and you will be profitable in your trading every month. The best way for you to have faith in your strategy is to trade it on a demo account. As long as you can achieve 2 consecutive months of profits in your demo account, you will have faith in your strategy.
2) The importance of risk reward in a strategy
From my account screenshot, you can see that my loss is around $1,200 to $1,500 per trade but my win is around $5,000 to $11,000. For all the trades, they have a risk reward of average 1:4 and above. There are some trades that goes to 1:6 which is my favorite.
If you can hit 1:6 for a trade, you will definitely be able to make money from trading cos 1 win can withstand 6 losses.
These are the things that people do not talk about. Most websites are telling you what is the winning percentage but to me this is useless. You can win a lot of 3:1 trades which means that 1 loss need 3 wins to balance.
When I am new to trading, I used to join forex signal service or copier service that trade with 100 pips stop loss and win 20 pips. In the end, I lose money every single month. They can produce 50 winning trades and 15 losing trades and they tell you that their winning percentage is 77% and that looks impressive.
But 50 winning trades of 20 pips = +1,000 pips and 15 losing trades of 100 pips = -1,500 pips. In the end, you still lose money with a strategy that has 77% winning percentage.
These are the work of marketers who know nothing about forex trading but just want to make money from us traders.
Therefore my advice for all of you here in my blog is to be more alert and do not fall prey to those marketers. There is nothing more important than risk reward ratio in trading. It is also the reason why I can stay profitable every single month without fail in my trading since 2009.
I hope that this post can inspire you guys who are still struggling in your trading that it is really possible to make a living trading forex and all you need is to find a strategy that can give you good risk reward ratio.
For those of you who are interested to find out more about my Fx street university course which comes with a 30 days trial to my Forex Signal Service, you can do so via the link below
Below is the video of the account I use to trade for my Forex BTB Signal service user
Below are the pictures that I have taken during the trip