Do you know how much in the way of profits you are realizing through your online trading over the course of the year? If not, here is a simple exercise that will enable you to find out the difference between your actual year-to-date percentage change and your spread-adjusted year-to-date percentage change:
1) Download all your trades for the year into an Excel spreadsheet. (If you don't know how to do this, call your broker for help.)
2) Establish the dollar value of the spread for each trade.
3) Summarize the total dollar value of all spreads for all trades and add this number to your current account balance; this is your spread-adjusted account balance.
4) Take the spread-adjusted current account balance and divide it by your opening balance at beginning of year; the result will be the spread-adjusted year-to-date percentage change.
5) Take your actual current account balance and divide it by your opening balance at beginning of year; the result will be a actual year-to-date percentage change.
6) Subtract your spread-adjusted year-to-date percentage change from your actual year-to-date percentage change.
7) That number should add up to 100% or more.
8) Utilize the basic steps below and improve your trading results by 100%!
These extremely simple pointers will help increase ForEx profits 100% and normally work for 99% of all short-term FX traders:
1. Stop trading so much! Although there are no commissions when you trade online, the spreads are enormous and it is these spreads that are reducing profits 100%!
2. Widen out your stops: Preliminary stop loss should be a minimum of 23 points. It is recommended that short-term traders set their stop losses between 23 and 35 points.
3. Widen out your profit targets: Unless there is a strong likelihood of a trade making you 100 points or more, don't do it.
4. Only trade in the direction of the 4 hour chart: the true money is made in the direction of the trend, nowhere else.
Disclimer: This website is for informational purposes only and is not intended to provide
specific commercial, financial, investment, accounting, tax, or legal advice.
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