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Have you ever considered if you are over trading? Yes a person can actually over trade if they are not careful. An over traded account would mean that there is too much risk being undertaken at that moment and that would lead to an account wipe! This is not a good thing and you would not want to be caught in such a position at all. Here are some tips to help you avoid this. (1) Set a profit objective A trader over trades because he or she doesn't know that such a thing as over trading actually exists. This is something that many Forex schools or course fail to teach. To prevent over trading a trader must first set up a profit objective. I prefer to do it in pips which means I set my profit target as how many pips I wish to make for that day and no more. It may seem strange because a lot of "experts" say that a trader should let their profits run and minimize their losses. Well at least these "experts" got the minimize losses part right. You never want to end a day with a loss if you are a day trader. The minimum you can walk off with is a break even. Be happy with a 10 pip profit per day! In fact my daily profit is 20 pips profit. If you can consistently make 10 to 20 pips a day it will take you just 2 years to make a million dollars from a standard account! Next you want to set a stop loss to minimize your losses and to prevent you from over trading. A stop loss is very important part of a trader's toolbox. If a person tells you that they do not trade with a stop loss I strongly suggest you do not take any advice from this person till you find out more about the trading strategy. The reason being, the market is unpredictable and volatile and you as a trader will not want your account and strategy to be as chaotic as the market. Set a stop loss to prevent your trade from running away from and killing your account. Having a margin call is not good and it shows that you are not planning your trades well, instead you are approaching this business wilt a spray and pray approach. Lastly is position sizing. When you take a position in the market (short or long) you want to adjust exactly how much you should risk and not over trade. If your account is a standard account I strongly you do not trade more than 5%. If you have a smaller account you should never go above 3% This sounds strange to many new traders, and they would be thinking that because my starting account is small I should take MORE RISKS to make more money! Read that last statement again, would you think it wise to take more risk to make more money? Why don't you take less risk to make MORE MONEY! It certainly sounds smarter don't you think so? Ask yourself are you over trading? If yes you had best put a stop to it with these tips and I suggest you find out more on how to use money management to control your trading so that you will be able to profit from Forex trading.


Dr. Joshua Geralds is a successful Investment Specialist with over twenty years experience increasing the income of people world wide. Visit http://www.pipsalot.com to learn how to make steady profits through safe trading and down load your FREE e-book "Money Management" for a limited time only!

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