by J Eagle
When I first started financial spread trading I read many books, subscribed to courses and attended numerous seminars on the subject. Whether it was shares, indices, commodities or forex I was pretty much led to believe that if I followed certain strategies my path to wealth was assured.
Armed with my new found knowledge I set to work, scouring the markets for opportunities to profit.
It didn't take long to realise that financial spread trading was going to be much more difficult than it looked.
All the charts I had studied showing beautiful trends that resulted in substantial winning trades suddenly appeared few and far between. In reality, I was faced with false break-outs, whip-saw and regularly being stopped out for loss. What was I doing wrong?
I stopped trading and decided to search for the answer that ironically was in front of me all the time. I came across a home study course developed by multi-millionaire trader Vince Stanzione and immediately I was struck by his honesty.
He explained that 6 out of 10 trades would either be losers or make no significant gain. Was this guy crazy? How was I going to make any money if 6 trades out of 10 were losers. I contacted his helpline and he repeated this fact. There would be lots of losing trades. The secret was to cut these losing trades short and allow the trades that developed in to winners to run as long as possible. That way, over the long run, the profits from the winning trades would outweigh the losers.
In my opinion, to understand this concept is absolutely essential to you success at financial spread trading.