Wednesday, August 5, 2009

Forex Tip 11

Think about risk/reward ratio before entering each trade.

How much money can you lose in this trade? How much can you gain? Now, make a decision if the trade is worth entering.Example : if trader is looking for possible 35 pips gain and possible 25 pips of loss, such conditions are not worth trading. Compare it with the situation when a trader has 100-120 pips of potential gain and only 10-20 pips of possible loss. This is the trade to open!

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