Posts Tagged ‘Accuracy’
There are tons of free forex signals and forex signal service providers online. The question we have to ask ourselves is does trading accuracy really matter when it comes down to becoming a profitable forex trader? In short the answer is no, accuracy doesn’t matter, but what does is money management. You can take just about any free forex signal service and turn it into a profitable trading system, so as long as you apply proper money management. Here’s how it’s done. Did you know most seasoned traders are wrong over half the time, yet they earn consistently from currency trading? Hard to believe isn’t it? It sure was when I first started trading, but after applying sound discipline and simple money management strategies it all became clear. Lately I’ve been using a 6:1 win to loss ratio. Meaning I only have to be right on my trades 1 time out of 6 to yield a profit. Let’s talk about this further. Keep in mind; this requires absolute discipline and the ability to follow your own rules. If I am trading on a 1 hour chart and I set my stops to 20 pips, this means I am taking profit at 120 pips. Therefore if I lose, I lose only 20 pips and when I win my trader, I win 120 pips. Remember 1 pip can be worth anything depending on your contract size for each pip, $1, $10 or $20, depending again on you. You do the math, if I only have to be right 1 out of 6 times, that means I only need to win at least 16 percent of my trades. Now is this hard to do? Yes and here’s why. There’s a reason only 5 percent of forex traders ever make it and that’s because of human emotion. What’s going to determine your success isn’t the system, the signals, but rather your ability to follow the rules and trade your plan. With that being said, there are a ton of great forex signal services out there. Go in with at least a basic understanding of the market and apply what you know to each signal. Applying what you know to each signal will help weed out the bad trades and keep you in the good ones. Lastly, using solid money management coupled with the basics, discipline and a signal service provider can make for a deadly trading weapon. Do your research; there are a lot of great services out there, just make sure to apply what you already know and stick to your plan.
.