The No. 1 Objective & How to Achieve It
Rule No.1: Never lose money. Rule No.2: Never forget rule
No.1. ~ Warren Buffett
First and foremost, before attempting to make any money out of the forex market, you have to
have money first. That's the most basic of all basic rules. What happens if you don't have money to trade? Well,
you can't trade and make money. Which makes this our NO.1 objective:
Capital Preservation
Remember that the no. 1 objective is NOT to make lots and lots of money. Making lots of
money is the outcome of practicing sound trading principles, not the goal. No matter what, your money must either
stay intact in your trading account, or you allow very little losses that you will still have money to trade with
in the future. Losing is part of the trading business, you can't win 100% of the time - that's a fact. The problem
with novice traders is that they target their winnings (say 20-30 pips a day) and let the losing trades run hoping
that the market will help them out by making an about-turn and convert their losing trades into winners. Sometimes
it happens (kudos to them), sometimes it doesn't. It's when the market decides not to help that we can kiss our
No.1 rule goodbye.
How do we preserve capital?
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