I asked Bill Poulos that question, when I found a chance to speak with him recently. Are you aware of what he remarked?

“Most experienced Forex traders wait too long to move stops to protect their positions and frequently watch their profits disappear.” And that was not the end of it. He continued, explaining a simple concept, akin to Gambler’s Ruin that is pervasive in the Forex trading world.

Generally, upon profits starting to dwindle away from a trade, traders tend to become obsessed with regaining the lost profits. They don’t remember to keep the profits safe that they still have to trade. What are the consequences? With the continuation of the reversal, the frustration of the trader becomes larger as the trade that was profitable once, is now a losing trade.

I have gone through this experience, which is the simplest trap to get ensnared into, as you try to tell yourself that the Euro had made an intra-day high and is bound to return there again! But… that never happens, continuing to drop until your 20 or 30 pip gain is converted into a 20 or 30 pip loss.

This might be an extreme example, but have you experienced this?

What action should you take?

There was an answer from Bill for that also!

He stated that the majority of traders are unaware of the available profit potential for any particular trade. In other words, they do not set profit targets that allow them to take profits off the table and exit the trade in several steps. And if a Forex trader lacks a strategy that has a primary goal of protecting capital with a secondary goal of managing profits, he does not have a prayer of surviving in the foreign currency markets.

To be properly positioned, it is essential for traders to have a multi-faceted strategy — one in which they can select the BEST available trades, clearly set a profit target, manage profit taking, and protect their capital!

He refers to this as handling the risk first, collecting profits second, and it’s really a revolutionary philosophy.

You can view the first part of his new, free video series regarding this topic at this link: http://www.profitabletradingtips.com/private-forex-training

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