www.informedtrades.com A lesson on why position sizing is one of the most important aspects to consider when trading the stock, futures and forex markets. So far in the lessons leading up to this one we have covered some of the different methods traders use to pick their entry points, as well as some of the different methods which traders use to set their exit points. In this lesson we are going to look at the factor which ties all of the above together and allows a trader the greatest control over their returns: Position Sizing. While position sizing is one of the Key components of successful trading, like many of the other things we have covered, it is often overlooked as an unimportant aspect of trading. What successful traders know however is that once the psychology of trading is mastered and a trader has developed a sound strategy for picking their entry and exit points, it is the method they use to determine the size of the positions they trade that is the final factor which will lead to their success or failure. To help illustrate this lets say that three traders are each given 000 and the same EUR/USD Mini Forex strategy to trade which has a win rate of 60% (makes a profit on 6 out of 10 trades) and makes an average profit on winning trades over the long term of 100 Points. On the losing side, this same system has a lose rate of 40% (takes a loss on 4 out of 10 trades) and takes an average loss on those trades of 90 points. So here we have a trading strategy

www.forexsuccessfultraders.com – Today, Certified Trader Josh Wilson takes 2 trades on the AUDUSD during a fast moving market. On a day filled with speeches and news, Josh preached caution while taking these trades, and he places his stop-losses carefully to avoid major price action going the wrong way. He takes his first trade, which consists of 2 fills, as the price enters the first Buy-Zone on the FxPM™ Matrix, and he is able to make a net +5 PIPS. Almost immediately afterward, Josh takes another entry and is able to make +10 off a fast retracement. Learn how to consistently profit in the Forex market by identifying precise entries and exits with FXPM™ and Forex Successful Online Training School.