How to avoid getting killed crossing an intersection or...trading forex.

There have been many times in the past and especially in the last couple of months, that light has been shed on the forex industry. For most people their insight into the industry is based on the stories they were told by a friend of a friend who lost money trading forex and based on this information, FOREX IS SURELY A SCAM, of course. Well, that is only half of the story

What most people do not understand is that individuals who start trading forex are unsuccessful because they do not exercise RISK AND MONEY MANAGEMENT, which is the most important aspect of trading in my opinion. Why do I say this? Well, most people who start out trading forex does not know how risk and money management works and thus they find themselves in a position of losing money. They blame forex for their lack of experience and total inability to understand the full impact that money and risk management has on trading. How do you do anything without having all the tools you need to do the job?

People that I speak to always says that forex is risky and my question to them is always...is crossing the road risky. 6 out of 10 times they say NO...I have remind them that it is risky to cross the road but because we exercise risk management by looking left and right before crossing the risk is minimize. It does not end there because while crossing you continue to look left and right. This does not mean that you can’t end up on the wrong side of a speeding vehicle but it does help to reduce the chances of that happening. In the same way, risk and money management is used to reduce and maintain acceptable risk.

At Global FX Solutions our policy is guides us to use only 1 -2% risk per trade with a maximum of 5% in total. We also don't use a stop loss but instead, we hedge our positions that could turn against us and then wait for the market to confirm it's direction so that we can continue the original trade and close the hedge or vice versa. We add another trade in the same direction and thus recover the loss on the trade we closed and gain profits on the new trade.

It is extremely essential to reduce your risk so that your losses don't impact your margin to such a degree that you down by big amounts but instead you are able to recover losses easily because they are small. The true effect and impact of the risk and money management is something that cannot be fully explained in a few words and thus learning to trade successfully is a process of no less than 24 months of full time trading.

Forex has always gotten a bad rap because of individuals who don’t know what they doing. If you decide to trade ensure that you get the necessary assistance to guide you on your forex journey. And for goodness sake use a demo account first.

Global FX Solutions have product and service solutions that can be tailor made to your requirements and level of trading. Don’t be part of those individuals who don’t understand forex because of a lack of knowledge and only goes on what a friend of a friend told them.