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Admissible Risk On Forex Market Part 2

Let’s understand the concept of unconditional accepting of losses as trade parts that, in my opinion is the most difficult to overcome to the majority of traders. Needless to say that we never conclude the bargain with intention to have loss and the majority of traders place stop warrants if the transaction won’t work.

Nevertheless, when the price comes nearer to stop warrant level the natural desire for the nonprofessional trader consists in removing the stop warrant far away from the price in hope that the market will be recovered. Sometimes it leads to that in attempt to prevent loss, the loss under the transaction increases repeatedly in comparison with originally planned.

Besides, when at the beginning trader the transaction originally goes against its position, and then is recovered to input level the trader closes the transaction, rejoicing that hasn’t lost money. Though, almost always as soon as the trader leaves at break-even level the market goes in that direction where assumed the analysis that invariably causes in the trader irritation.

As it is regrettable, but it often turns to a vicious circle which can be broken off only having reached confidence of the methodology and having realized risk accepting. Therefore, as you see, placing of rigid “stop warrant” not necessarily means that the trader is ready to a risk capture.

At the seminars I teach traders to argue categories of risk against profit and also probabilities. In the given series of articles we will strongly not go deep into a theme of risk / of profit, and we will discuss game of probabilities more likely.

Like the professional player in poker, the trader should find the market advantage. The player in poker studies what card combination assumes the highest chances to win for it. The player in poker understands that it is necessary to stake only in the event that chances develop in its advantage. Besides, professional players in poker, realize that they can’t win constantly, but if they play many batches their game advantage will bring it positive result through any time. In the same way the professional trader concludes the transactions on a regular basis, without worrying that it can have in loss or appear wrong. It considers each transaction only as one of hundred or thousand in the trading career.

I understand that it is easier to tell than to make and, possibly, it is required to make some efforts to change the thinking. On the other hand, those traders who can’t consult with the fears concerning losses or possibility to appear wrong will always work in the environment of intensity and anxieties. Undoubtedly, they will have profits and losses, but during some moment, trade for them becomes heavy work, instead of pleasure.

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