EUR/USD Thetradersclub daily analysis

[thetradersclub]

I have decided to consolidate the daily analysis posts to this new thread in future.
Thank you for your support and I hope to see you there...

http://forexforums.com/forums/showth...1042#post31042

Cheers,

Chris.

[thetradersclub]

Key number 2: Managing risk per account

Forex brokers will offer you 100:1 and even 200:1 leverage, promising that these offer opportunities to easy and quick riches.

Don’t believe it for one minute!

When you leverage your account, you are actually borrowing money from the broker with the hope that your trading will make you money on the borrowed funds. It’s the same as taking a loan from the bank and “gambling” it in your trading account. A little leverage is OK – it makes sense to make money using other peoples funds, but too much will lead you to disaster quicker than you can blink.

Here it is: As a rule of thumb, I recommend no more than 10:1 leverage on your trades.

That means for every $10,000 in your mini account, you should trade no more than 10 mini lots, or for every $100,000 in your full trading account, you should trade no more than 10 full (100k) lots.

But can you make money at this leverage?

Of course!

I will show you later how this modest leverage can be used to convert your account safely into many multiples of the initial balance, if traded wisely.


Key number 3: Compounding profits

The power of compounding is simply amazing.

Compounding means that you re-invest some or all of each months profits back into your trading account and you use the profits to generate more returns. The only way I can show you the power of this process is in real numbers, and I intend to do just that right now.

Trading plan for our signals to explode the profits in your account!

First of all, let’s look realistically at what you can expect to achieve each month, based on our current achievements at www.thetradersclub.com and our previous experience as well.

The average pips-per-month is roughly 300, with some months over 500. We need to know what to expect before we can make any projections going forward. Please remember though, that past performance is no guarantee of future returns, and the risk disclaimer on our site should be read and understood before proceeding.

Now we know the expected returns in pips, we know that the leverage should not be more than 10:1 on your account, and we know that the trading system works and should be followed as it generates signals (no moving stops or adding to losing trades!)

What will this generate on our account? The spreadsheet attached gives us...( I am unable to attach the spreadsheet please check it out on my site freeforex4all.com )

Scenario 1 – Conservative returns of 200 pips per month and no drawdown months, at only 5:1 leverage (instead of 10:1). Take a look…

To be continued Thursday...

[thetradersclub]

This last scenario was based on 200 pips per month and no losing months, at a 5:1 leverage. We have already discussed leverage, but let me remind you that this means 5 mini lots per trade position per $10,000 in your trade account, or 5 100k lots per trade position per $100,000 in your full account.

As you can see, I have even allowed for a deduction of $100 per month for subscription fees!

The account grows from a starting balance of $10,000 to a final balance of $88,200 after two years!

Yes, that’s eighty eight thousand two hundred dollars after two years!

This has been achieved at a conservative 200 pips a month with a very safe leverage of only 5:1, and you can see that most of the growth has come about through sensible growth and re-investing profits at a safe rate of return.

That’s the power of compounding!

Note how the number of lots traded grows as the account balance grows, enabling you to make more money from the money you have already made. If you push the projection out for just one more year, the profits are an amazing $274,200!!

Well, if only it were as simple as that. The problem is that not every month is a winner (although 100% are at this time) and we don’t make 200 pips every other month. The good news is that we actually make over 300 pips per month most of the time, and the bad news is that we must allow for losing months.

Ok, so let’s look at scenario 2 – a more realistic picture of what might be achieved. I have changed the winning months to 300 pips each (compare this to the actual results in the table on the first page) and have also allowed for three losing months of -350 pips each. Let’s look at the more realistic Scenario 2:

[thetradersclub]

Note that Scenario 2 produces $95,000 in the 24 month period.

That’s a return of $85,000 on an initial investment of only $10,000.

And that’s allowing for three losing months of 350 pips each.

OK well, there you have it. How to transform a small trading account into a much larger one using sensible money management and a profitable trading system. I would very much like to help you achieve the same.
In fact, we have been using a leverage of 5:1 in these calculations, but when using 10:1 leverage, the same $80,000 is achieved in only 2 years from a starting balance of only $1000!

Consider these facts:
1. The scenario tables above, which show you can multiply your account over and over again, are simple maths – no gimmicks and no tricks – as long as you can stick to the trading methods and keep your head!

2. If you apply the 3 simple disciplines we have mentioned, and join the Live Charter Group of James’s, so that you have a reliable trading system as well to assist you, you have a good chance of converting your account into a genuine money spinner! Of course there are no guarantees, and there is always a risk, but we have shown it can and is being achieved.

3. On your own, you may struggle to produce profitable trades. With the Live Charter Group you will have the best possible chance of making money from the Forex. And it will only cost you a small fraction of your trading profits – that’s why we even took them off the profit examples on the Excel sheets above.
I really hope that this article clarifies the power of compounding for you, and helps you understand just how important this factor is in the long term picture.

Cheers for now,
Chris.
P.S. My business partner, James, applies this in a live environment to show traders exactly how it works in the real world. If you really want to learn how to apply this practically then check out his Live Charter Group .
P.P.S. If you want a PDF of this complete report then just enter your details on my site www.traders-live.com and I will send it to you straight away.

[hotforex]

nice..up up up

[Marshal]

This is all useful info to me, thanks

[EU_TRADER]

I have decided to consolidate the daily analysis posts to this new thread in future.
Thank you for your support and I hope to see you there...

http://forexforums.com/forums/showth...1042#post31042

Cheers,

Chris.

Nothing lately, aye mate?