Undergraduate – Senior

Develop the proper risk management skills and mindset so you don’t become part of the 95% of new traders who end up losing all their money.

Risk Management

Be a trader, not a gambler! Read on to find out the difference between the two.

  1. What Is Risk Management?

    Risk management is one of the most overlooked areas of trading but it is one of the most crucial for success. Here’s why…

  2. How Much Trading Capital Do You Need For Forex Trading?

    Here are a few things you should consider when figuring out how much money you should allot for trading.

  3. Drawdown and Maximum Drawdown Explained

    What would happen if you didn’t follow your risk management rules? You can find out the hard way, or you can read this example.

  4. Never Risk More Than 2% Per Trade

    Still trying to figure out how much you should risk per trade? Here’s an illustration that could help you with your risk management rules.

  5. Reward-to-Risk Ratio

    Wanna learn a great way to increase your profitability? You can start by improving your reward-to-risk ratio.

  6. Study Your Losses to Realize Gains

    Why scrutinizing your losing trades can help you realize more gains.

  7. Summary: Risk Management

    Make sure that your risk management rules are in place and that you follow them at all times. You don’t want to lose your shirt!

The Number 1 Cause of Death of Forex Traders

Just because brokers allow you to open an account with only 25 USD doesn’t mean you should. That is, unless you want to fail.

  1. Ignoring Leverage: Why Most New Forex Traders Fail

    What exactly is leverage and how does it work? Make sure you get this concept down pat so you don’t get any surprises!

  2. Leverage and Margin Explained

    What is the difference between leverage and margin? You don’t want to confuse those two terms and wreck your account.

  3. Margin Call Explained

    Everyone fears the dreaded margin call. What does this mean and what happens after you get it? Read on to find out!

  4. Be Careful Trading On Margin

    Make sure you fully understand how margin and leverage work in order to avoid getting a margin call. Here’s how you can do that:

  5. See How Leverage Can Quickly Wipe Out Your Account

    Check out this concrete example of a trader whose account got blown by the negative effects of leverage.

  6. Low Leverage Allows New Forex Traders To Survive

    The more leverage you use, the less breathing room you have for the market to move before you get a margin call. Here’s an example to illustrate.

  7. How Leverage Affects Transaction Costs

    Not only does leverage amplify your losses, it also amplifies your transaction costs as a percentage of your account. Check out this illustration.

  8. Never Underestimate Leverage

    Understand when to take advantage of leverage and when it can damage your account. Here are some things to take note of.

Position Sizing

Position sizing is setting the correct amount of units of a currency pair to buy or sell.

  1. Position Sizing

    Knowing how to properly calculate your position size is crucial in risk management. Here’s what you need to calculate your position size.

  2. Calculating Position Sizes

    Here are some examples on how to calculate your position size whether your account denomination is the same as the base currency or not.

  3. How to Calculate Your Position Size in Different Forex Pairs and Account Currencies

    In this lesson, you will learn how to calculate your position size when your account denomination isn’t one of the currencies in the pair currency pair that you wanna trade.

  4. Summary: Position Sizing

    No time to crunch the numbers yourself? Check out our position size calculator tool that can help you manage your risk well.

Setting Stop Losses

Stop losses not only help you limit your losses and help you move on, they also eliminate the anxiety caused by losing on an unplanned trade.

  1. What is a Stop Loss?

    Thinking where to place stop losses is one of the most important things that you should do before even entering a trade. “Live to trade another day,” is something you should always remember in trading.

  2. How To Set A Stop Loss Based On A Percentage Of Your Account

    Never ever set stops based solely on the amount you’re willing to lose. Setting stops based on your account balance is a sure fire way to lose!

  3. How To Set A Stop Loss Based On Support And Resistance From Charts

    One of the best ways to set stops is based on charts. Find the places where prices can’t seem to push or break and then decide where to place your stop.

  4. How To Set A Stop Loss Based On Price Volatility

    Did you know that you can set stops based on the volatility of a certain pair? Knowing how much a currency pair tends to move can help avoid being prematurely taken out of a trade by the random movements of price.

  5. How To Set A Stop Loss Based On A Time Limit

    Time is of the essence, even when trading forex. Set up a time limit to cut off those dead-weight trades so your free to move on to new opportunities.

  6. 4 Big Mistakes Traders Make When Setting Stops

    There are a lot of mistakes traders make when setting stops. Here’s a list of the most common ones.

  7. 3 Rules To Follow When Using Stop Loss Orders

    Often times, the market doesn’t move in accordance with your expectations. You have to know the times that you should stick to your pre-determined limit orders or make stop adjustments on-the-fly.

  8. Summary: Setting Stops

    Like anything else in trading, setting stop losses is a skill. If you continually practice the correct way to set stops, you’ll be one step closer to becoming a professional risk manager!

Scaling In and Out

Don’t worry! We won’t tell you to weigh yourselves before and after your trades. Instead, this section will teach you how to get creative when making pips!

  1. Scaling In And Out Of Positions

    Scaling is one of the most important strategies in risk management that you need to learn to be consistently profitable. It can help you adjust your overall risk, lock in profits, and maximize your profit potential.

  2. How To Scale Out Of Positions

    “I’m winning. Should I keep my trade open or should I close it?” The answer doesn’t need to be just one of those… Sometimes, you can actually choose to do both!

  3. How To Scale In Positions

    Adding to a losing position is considered as a no-no by many traders, but it’s possible to do safely. Learn how.

  4. How To Add To Winning Positions

    While it may lead to a higher level of risk sometimes, if done correctly, adding to an open winning position gives you the ability to increase your maximum profit.

  5. Summary: Scaling In and Out Trades

    Knowing the correct way of scaling in and out of trades is essential. Manage your trade properly and sooner or later, you will catch that one move that will bank you some serious money!

Currency Correlations

Have you ever noticed that when a certain currency pair rises, another currency pair falls? Somehow, they’re all connected.

  1. Currency Correlation Explained

    Simply put, currency correlation tells us whether two currency pairs move in the same, opposite, or totally random directions.

  2. How To Read Currency Correlation Tables

    Take a look at the strength (or weakness) of correlations between the most popular currency pairs over various time frames!

  3. Are You Doubling Your Risk Without Knowing It?

    When you are simultaneously trading multiple currency pairs in your trading account, you should always make sure that you’re aware of your total risk exposure.

  4. 5 Reasons Why Factoring In Currency Correlations Help You Trade Better

    You’re probably wondering how using currency correlations can improve your trading. Well, wonder no more because we know the answer!

  5. Be Careful! Currency Correlations Change!

    Although correlations between currency pairs are strong (or weak) for days, weeks, months, or even years, they may eventually change–sometimes when you least expect it!

  6. How To Calculate Currency Correlations With Excel

    You can calculate currency correlations in the comfort of your own home with your favorite spreadsheet application. We’ll teach you how.

  7. Summary: Currency Correlations

    Like synchronized swimmers, some currency pairs move in tandem with each other. And like magnets of the same poles, other currency pairs move in opposite directions.