Podcast:

In this video:

00:40  Understanding the difference between a big stop loss and a big risk

03:34  Information and trade results from clients

06:46  High reward to risk trading using low risk per trade

It’s really important that you don’t risk taking a big stop loss on a trade and associate with taking a big risk on a trade– they’re two completely different subjects. I’m going to tell more about that right now.

The Difference between a big stop loss and a big risk

Hi, traders it’s Andrew Mitchem here the Forex Trading Coach today is Friday the 4th of April and it’s Non-Farm employment day today and more about that later on in the video and podcast.

But first of all that I want to talk about, the differences between taking a big stop loss on a trade and a big risk on a trade they’re two completely different topics and it’s really important as a trader that you understand the difference. When you place a trade and you place a stop loss at a safety level for a reason to protect the trade and that stop loss amount in pips can vary of course between different currency pairs, different setups that you’re taking, different chart setups and of course different timeframe charts that you’re taking. But just because you’re taking a larger stop loss in terms of the number of pips on a trade don’t associate that or get that mixed up with taking a big risk on a trade. You see, if for example you were to take a 50 pip stop for example on a trade and you placed it there because that’s the level needed to be at to protect the trade. Not 50 pips because it’s an easy number to calculate or it’s the same on every trade that’s not how you should trade but let’s take for example 50 pips as the trade that you’ve decided needs, that level needs, that level needs to be at stop loss.

However if you are looking on that trade at having a profit target of 150 pips and again it’s not because it’s just three times the risk or because a round number. Let’s assume on this trade that 150 pips is the perfect profit target placement that is giving you a 3 to 1 reward to risk trade and so you must not associate that 50 pips for being a too big a risk and it’s an email that I get or a subject that I get on emails that’s really often from non clients and people are just getting too confused with that.

Another example is that let’s say you had $1,000 account and you were taking a trade with a 10 pip stop loss most people would associate a 10 pip stop loss as a low risk trade where in fact it may be or may not be. Let’s say on your $1,000 account you’re taking two standard lots on that trade now on most currency pairs two standard lots equals roughly around $20 per pip if you get stop out of that trade that’s $200 gone. Now $200 out of a $1,000 account is a huge risk. So can you really risk 20% of your account with just one trade? No you can’t that’s the answer. But most people associate that trade but just a 10 pip stop loss that’s been a really low risk and so you can see that by using that example how a 10 pip stop loss for two standard lots equals too big a risk yet that’s only 10 pips so that’s a really important point there to make.

Amazing Clients Trading Results

The other thing that I want to quickly tell you about is the webinar that I held last night for my clients and I’ve got some printouts here on emails from clients that sent me information and trade results over the last couple of weeks since our previous webinar. I’d really like just to read out a few of these just to share with you. I can promise you that all printouts I’ve got, emails addresses are all clients are all 100% genuine comments that I’m about to read out.

The first one here, I just quickly run through them I’m not going to mention names obviously but this person said, “Another 6% today without hardly trying just on ...