What is the little known secret for surefire profits in Forex and Currency markets?
You must invest with a “Poker Mentality”!
What does that mean?
You must be willing to lose… throw in your hand early just like you do in poker when the trade isn’t going your way. Be willing to be wrong – keep the losses small and let the profits run – follow the trade with a trailing stop.
Here’s a quote from the legendary book, “Market Wizards” by Jack D. Schwager which puts this in perspective:
“I learned how to play poker at a very young age. My father taught me the concept of playing the percentage hands. You don’t just play every hand and stay through every card, because if you do, you will have a much higher probability of losing. You should play the good hands, and drop out of the poor hands, forfeiting the ante. When more of the cards are on the table and you have a very strong hand – in other words, when you feel the percentages are skewed in your favor – you raise and play that hand to the hilt.”
“If you apply the same principles of poker strategy to Forex trading, it increases your odds of winning significantly. I have always tried to keep the concept of patience in mind by waiting for the right trade, just like you wait for the percentage hand in poker. If a trade doesn’t look right, you get out and take a small loss; it’s precisely equivalent to forfeiting the ante by dropping out of a poor hand in poker. On the other hand, when the percentages seem to be strongly in your favor, you should be aggressive and really try to leverage the trade similar to the way you raise on the good hands in poker.”
But here’s the secret that it takes years to learn… and I’ve been at this for three decades… you can lose on four trades out of five (and most of the pros do) and still be a big winner overall… as long as you keep those losses small.
A trade should be working out right from the entry, if it isn’t, get out and look for another entry point.
