0115 946 9399

Why You Are Losing Money


Let’s see if we can help!!

This is a very simple question but just not a so simple answer.

Firstly, the most important thing when beginning ones trading journey is to have a methodology to trade. It doesn’t matter what this methodology is but as long as you have one.

Within a trading methodology you not only need a method of having “Buy” or “Sell” signals but also a method of knowing when you are “Wrong”.

The secret to long term trading success is very much down to money management. If you do not know when the trading signal you took is wrong on a technical basis you are destined for trading failure.

Let us assume one is using a 20k trading account and risking 2% per trade. That means each trade your maximum risk is going to be 400. If it was not known at what place your trade was technically wrong how can you place a proper protective “Stop” in the technically correct place.

Yes, you could say I will place my stop at the 400 risk level. Very fine but this could be in the middle of no man’s land. In other words a trade could reverse a little but not to where the stop should have been placed, take you out, and then go in the direction you had previously thought. This would be bad trade and money management and should be avoided at all costs.

It is important to know where your trade is wrong, (REMEMBER RISK IS THE ONLY THING THAT YOU CAN CONTROL AT THE TIME OF ENTERING A TRADE) because it allows you to assess if you should be entering the trade in the first place.

Let me explain.

Using the above example where your risk should be no greater than 400. Based on your methodology your trade signal is indicating that the risk with this trade would be say 600. It is quite obvious this would be a trade to pass on. The risk is too great. The thing to do if a scenario like this arose, which often does happen, is to wait on the next trade that is within your allowed risk factor. This is not always easy to do because as members of the human race we are all afraid of missing a money making opportunity. “This could be the big one”. This could be a big trade that is being left behind but at the time of the trade entry all you as a trader can control is the risk. Never worry. Be disciplined because as I have already stated there are always more opportunities in the not so distant future that will be within your risk factors.


Cutting your losses and letting your profits run is also key to trading success.

This is a statement much easier said than done but is a must for success.

Knowing ones risk is one thing (and very important at that) but also letting your profits run is also very, very important.

Let’s continue to use the previous example of a 400 risk. If one was stopped out a few times and each time losing 400 (£,$) but when a trade then went in your favour to say 200/250 open profit and was then closed it would mean that the loss to gain ratio was greater than the gain to loss ratio. This happens to many private traders and perhaps can be tempting to do especially if there have been a few losses in a row but it is certainly not the correct thing to do. It is imperative that one’s gain to loss ratio is correct. Having a plan in place that has an overall gain ratio greater than its loss ratio is very important.

A professional trader might only have a 50% strike rate in relation to winning trades compared to losing trades but overall they are making substantial money. In fact some of the large trading house traders have a strike rate less than 50%. This is because their losing trades are much smaller than their winning trades. They do let their profits run. This is a very important factor to grasp from a retail traders point of view and a very necessary one to implement.

Another key point to trading success is the position sizing.

Position sizing whether it be in Forex, options futures or stocks is also a very key part of being a successful Financial trader.

Position sizing is often not considered but when properly understood and implemented into a trading plan it completes the picture that is called “Money Management”.

We will discuss position sizing in a later article but first grasp the two factors we have discussed here.
That is to know your risk amount and then having a proper risk to reward ratio.

Consistently use these two factors coupled with a good trading signal methodology and losing money should be a thing of the past,

126 Responses

  1. I just want to say I am beginner to weblog and truly loved this page. Probably I’m likely to bookmark your blog post . You definitely come with incredible articles and reviews. Cheers for sharing your web site.

  2. We are a group of volunteers and opening a new scheme in our community. Your web site provided us with valuable information to work on. You have done an impressive job and our entire community will be thankful to you.

  3. A formidable share, I simply given this onto a colleague who was doing somewhat analysis on this. And he in reality bought me breakfast because I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to debate this, I feel strongly about it and love studying extra on this topic. If possible, as you grow to be expertise, would you thoughts updating your blog with more details? It’s highly helpful for me. Huge thumb up for this weblog put up!

  4. I simply want to tell you that I am beginner to blogging and definitely liked your web-site. Most likely I’m want to bookmark your blog . You definitely have incredible article content. Thanks a bunch for sharing with us your web site.

  5. Great – I should definitely pronounce, impressed with your site. I had no trouble navigating through all the tabs as well as related info ended up being truly easy to do to access. I recently found what I hoped for before you know it in the least. Quite unusual. Is likely to appreciate it for those who add forums or anything, web site theme . a tones way for your client to communicate. Excellent task..

  6. Thanks so much for providing individuals with an exceptionally wonderful chance to discover important secrets from here. It is usually so superb and also stuffed with a good time for me personally and my office peers to search your web site the equivalent of three times weekly to study the fresh guides you have got. And of course, I am also actually pleased considering the awesome points served by you. Selected two tips on this page are particularly the most impressive we have ever had.

  7. I like the helpful information you provide in your articles. I will bookmark your weblog and take a look at once more here frequently. I’m fairly sure I will be informed many new stuff proper here! Good luck for the next!

  8. Oh my goodness! an amazing article dude. Thanks However I am experiencing problem with ur rss . Don’t know why Unable to subscribe to it. Is there anyone getting equivalent rss drawback? Anyone who knows kindly respond. Thnkx

  9. I would like to thnkx for the efforts you have put in writing this blog. I am hoping the same high-grade blog post from you in the upcoming also. Actually your creative writing skills has inspired me to get my own website now. Really the blogging is spreading its wings rapidly. Your write up is a good example of it.

  10. I believe this is among the most vital information for me. And i’m happy reading your article. However want to observation on some common issues, The website style is great, the articles is really nice : D. Excellent job, cheers

  11. You really make it seem so easy with your presentation but I find this topic to be really something that I think I would never understand. It seems too complicated and very broad for me. I’m looking forward for your next post, I will try to get the hang of it!

  12. Hey there, I think your blog might be having browser compatibility issues. When I look at your blog site in Chrome, it looks fine but when opening in Internet Explorer, it has some overlapping. I just wanted to give you a quick heads up! Other then that, superb blog!

  13. I just want to say I am just new to blogging and site-building and definitely savored this web site. Probably I’m likely to bookmark your blog post . You actually have very good posts. Bless you for revealing your blog.

  14. There are actually quite a lot of particulars like that to take into consideration. That could be a nice level to deliver up. I supply the thoughts above as basic inspiration but clearly there are questions like the one you carry up the place an important factor will likely be working in trustworthy good faith. I don?t know if finest practices have emerged around issues like that, however I’m sure that your job is clearly identified as a fair game. Each girls and boys really feel the impression of only a moment’s pleasure, for the rest of their lives.

  15. I must thank you for the efforts you have put in penning this blog. I’m hoping to see the same high-grade blog posts by you in the future as well. In truth, your creative writing abilities has encouraged me to get my own website now 😉

  16. Its wonderful as your other articles : D, regards for putting up. “The rewards for those who persevere far exceed the pain that must precede the victory.” by Ted W. Engstrom.

  17. It’s a shame you don’t have a donate button! I’d definitely donate to this outstanding blog! I guess for now i’ll settle for book-marking and adding your RSS feed to my Google account. I look forward to brand new updates and will talk about this site with my Facebook group. Chat soon!

  18. Hi there this is kinda of off topic but I was wondering if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding experience so I wanted to get advice from someone with experience. Any help would be greatly appreciated!

  19. Simply wish to say your article is as amazing. The clarity on your submit is just nice and that i can assume you are knowledgeable on this subject. Well along with your permission let me to grab your RSS feed to stay updated with drawing close post. Thank you a million and please continue the enjoyable work.

  20. After looking into a handful of the articles on your site, I seriously appreciate your technique of writing a blog. I book marked it to my bookmark site list and will be checking back in the near future. Please check out my web site as well and tell me what you think.

  21. Greetings from Idaho! I’m bored to tears at work so I decided to check out your site on my iphone during lunch break. I love the info you present here and can’t wait to take a look when I get home. I’m surprised at how quick your blog loaded on my cell phone .. I’m not even using WIFI, just 3G .. Anyhow, wonderful blog!

  22. Woah! I’m really enjoying the template/theme of this website. It’s simple, yet effective. A lot of times it’s very difficult to get that “perfect balance” between superb usability and visual appearance. I must say you have done a fantastic job with this. Also, the blog loads very fast for me on Chrome. Excellent Blog!

  23. Pretty nice post. I just stumbled upon your weblog and wanted to say that I have really enjoyed browsing your blog posts. After all I’ll be subscribing to your rss feed and I hope you write again soon!

  24. I am glad for writing to make you be aware of what a beneficial experience my friend’s princess enjoyed visiting your web page. She figured out a wide variety of issues, not to mention what it’s like to possess a wonderful teaching mindset to make a number of people without difficulty thoroughly grasp some extremely tough subject areas. You actually exceeded her expectations. Many thanks for rendering these great, safe, educational not to mention unique tips about that topic to Gloria.

  25. There are a few fascinating points with time in this post but I do not know if I see every one of them center to heart. There may be some validity but Let me take hold opinion until I explore it further. Good write-up , thanks and then we want far more! Included in FeedBurner likewise

  26. I feel this is one of the such a lot significant information for me. And i’m happy reading your article. But should statement on few basic issues, The web site taste is ideal, the articles is in reality nice : D. Excellent task, cheers

  27. Thanks for the sensible critique. Me & my neighbor were just preparing to do some research about this. We got a grab a book from our area library but I think I learned more clear from this post. I am very glad to see such great info being shared freely out there.

  28. I have to thank you for the efforts you’ve put in writing this website. I am hoping to view the same high-grade blog posts by you in the future as well. In fact, your creative writing abilities has inspired me to get my own site now 😉

  29. Oh my goodness! Incredible article dude! Thank you, However I am having difficulties with your RSS. I don’t know the reason why I cannot join it. Is there anyone else having similar RSS issues? Anyone who knows the answer will you kindly respond? Thanks.

  30. Right here is the perfect webpage for anyone who would like to understand this topic. You realize so much its almost tough to argue with you (not that I really will need to횜HaHa). You certainly put a brand new spin on a subject that’s been discussed for a long time. Wonderful stuff, just wonderful!

  31. Oh my goodness! Incredible article dude! Many thanks, However I am going through problems with your RSS. I don’t know why I am unable to join it. Is there anyone else getting the same RSS problems? Anyone who knows the answer will you kindly respond? Thanks!!

  32. I appreciate making to debate this, I’m boldy about this and then fancy looking into more on this process topic. If it turns out would-be, any time you achieve professionalism, could you thoughts and feelings modernizing your own site utilizing even further help and advice? This can be very a good choice for me personally.

  33. I’ve been surfing online more than 3 hours today, yet I never found any interesting article like yours. It is pretty worth enough for me. In my opinion, if all webmasters and bloggers made good content as you did, the internet will be a lot more useful than ever before.

  34. The subsequent time I learn a blog, I hope that it doesnt disappoint me as much as this one. I mean, I do know it was my choice to learn, but I truly thought youd have one thing attention-grabbing to say. All I hear is a bunch of whining about one thing that you possibly can fix if you werent too busy on the lookout for attention.

  35. Good post. I study one thing more challenging on completely different blogs everyday. It will at all times be stimulating to learn content from different writers and observe slightly one thing from their store. I’d choose to make use of some with the content material on my blog whether you don’t mind. Natually I’ll give you a hyperlink in your net blog. Thanks for sharing.

  36. Simply desire to say your article is as astounding. The clarity to your publish is just cool and i could assume you’re a professional in this subject. Fine with your permission let me to snatch your feed to keep up to date with impending post. Thank you 1,000,000 and please keep up the enjoyable work.

  37. You are my intake, I have few web logs and often run out from post :). “The soul that is within me no man can degrade.” by Frederick Douglas.

  38. I’m impressed, I have to admit. Actually rarely will i encounter a weblog that’s both educative and entertaining, and let me tell you, you’ve got hit the nail within the head. Your idea is outstanding; the problem is an element that not enough everyone is speaking intelligently about. My business is very happy i always stumbled across this at my find some thing about it.

  39. I’m amazed, I must say. Seldom do I encounter a blog that’s equally educative and engaging, and let me tell you, you’ve hit the nail on the head. The issue is something that too few folks are speaking intelligently about. Now i’m very happy I found this during my hunt for something regarding this.

  40. Do you mind if I quote a couple of your posts as long as I provide credit and sources back to your webpage? My blog site is in the very same niche as yours and my users would certainly benefit from some of the information you present here. Please let me know if this ok with you. Thanks a lot!

  41. Hi, I do believe this is a great website. I stumbledupon it 😉 I am going to return yet again since i have book-marked it. Money and freedom is the best way to change, may you be rich and continue to guide other people.

  42. I and also my buddies came checking the nice ideas on your web blog then then developed a terrible suspicion I never expressed respect to you for them. Most of the boys appeared to be absolutely stimulated to see all of them and have unquestionably been using those things. Thanks for being considerably helpful and then for picking out this kind of nice information most people are really needing to be aware of. My very own sincere regret for not expressing gratitude to you sooner.

  43. We absolutely love your blog and find many of your post’s to be exactly what I’m looking for. can you offer guest writers to write content to suit your needs? I wouldn’t mind composing a post or elaborating on a few of the subjects you write about here. Again, awesome web log!

  44. The next time I read a weblog, I hope that it doesnt disappoint me as a lot as this one. I mean, I know it was my option to read, however I really thought youd have something interesting to say. All I hear is a bunch of whining about something that you would fix when you werent too busy searching for attention.

  45. Hey would you mind letting me know which web host you’re working with? I’ve loaded your blog in 3 completely different browsers and I must say this blog loads a lot quicker then most. Can you recommend a good hosting provider at a fair price? Many thanks, I appreciate it!

  46. This web page is really a walk-through for all of the information you wished about this and didn’t know who to ask. Glimpse here, and you’ll definitely discover it.

  47. Just wish to say your article is as surprising. The clarity in your post is just nice and i can assume you are an expert on this subject. Well with your permission let me to grab your feed to keep updated with forthcoming post. Thanks a million and please continue the gratifying work.

  48. The following time I learn a weblog, I hope that it doesnt disappoint me as a lot as this one. I imply, I know it was my choice to read, however I truly thought youd have something attention-grabbing to say. All I hear is a bunch of whining about one thing that you might repair when you werent too busy looking for attention.

  49. The very root of your writing while appearing agreeable originally, did not really work perfectly with me after some time. Someplace throughout the paragraphs you were able to make me a believer but just for a short while. I however have a problem with your jumps in assumptions and one might do well to help fill in those breaks. In the event that you can accomplish that, I could definitely end up being amazed.

  50. I was just looking for this info for some time. After 6 hours of continuous Googleing, finally I got it in your site. I wonder what’s the lack of Google strategy that don’t rank this kind of informative websites in top of the list. Usually the top web sites are full of garbage.

  51. Youre so cool! I dont suppose Ive learn anything like this before. So good to search out any individual with some unique thoughts on this subject. realy thanks for beginning this up. this web site is something that is needed on the net, somebody with somewhat originality. useful job for bringing something new to the web!

  52. Please let me know if you’re looking for a article writer for your blog. You have some really great posts and I feel I would be a good asset. If you ever want to take some of the load off, I’d absolutely love to write some articles for your blog in exchange for a link back to mine. Please send me an email if interested. Cheers!

  53. What i do not understood is actually how you’re now not actually much more smartly-favored than you might be right now. You are very intelligent. You already know thus significantly on the subject of this topic, made me in my opinion imagine it from numerous various angles. Its like women and men don’t seem to be fascinated except it’s one thing to accomplish with Girl gaga! Your personal stuffs nice. Always deal with it up!

  54. Howdy! I could have sworn I’ve been to this website before but after reading through some of the post I realized it’s new to me. Anyways, I’m definitely glad I found it and I’ll be bookmarking and checking back frequently!

  55. Nice blog! Is your theme custom made or did you download it from somewhere? A design like yours with a few simple tweeks would really make my blog stand out. Please let me know where you got your design. Thanks a lot

  56. Have you ever considered writing an ebook or guest authoring on other sites? I have a blog centered on the same subjects you discuss and would really like to have you share some stories/information. I know my subscribers would enjoy your work. If you’re even remotely interested, feel free to shoot me an email.

  57. Awesome blog! Do you have any recommendations for aspiring writers? I’m planning to start my own site soon but I’m a little lost on everything. Would you advise starting with a free platform like WordPress or go for a paid option? There are so many options out there that I’m completely confused .. Any suggestions? Cheers!

  58. Hi there, just became aware of your blog through Google, and found that it’s really informative. I am going to watch out for brussels. I’ll be grateful if you continue this in future. Many people will be benefited from your writing. Cheers!

Leave a Reply