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How To Loose Everything - The Worst Forex Trading Strategy Ever That You Might Be Using
How To Loose Everything - The Worst Forex Trading Strategy Ever That You Might Be Using
by David Jenyns
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You may be wondering, `Why would David Jenyns write about the
worst Forex trading strategy around?`
There are a couple of reasons:
First, to warn you about the worst Forex trading strategy,
because you really don`t want to end up using this system.
Second, because once you know the worst possible Forex trading
strategy, the one that is designed to maximize your losses over
the long run, then you can reverse it to craft a strategy which
does the exact opposite.
With what you learn from the worst Forex trading strategy, you
will be able to create a system that will produce some
tremendous long-term gains. The worst Forex trading strategy I`m
referring to, which is simply the worst Forex trading strategy I
have ever encountered, is known as averaging down. This
horrifying Forex trading strategy is the process of buying more
shares that you had previously acquired, as the price drops.
Traders often purchase shares this way in an effort to reduce
their initial entry price.
Only bad investors average down by buying shares of a sinking
assests to decrease their overall average price per share. This
Forex trading strategy is hardly ever effective, and is often
like throwing good money after bad. It also magnifies a trader`s
loss if the share keeps dropping. Remember, just because a share
is cheap now that doesn`t mean it`s not going to get any
cheaper. However, let`s examine how this devastating Forex
trading strategy works. Say you bought one thousand shares at
$40.
The novice investor may not have a stop loss in place, and the
share price falls to $30 dollars. Here comes the stupidity of
this Forex trading strategy - to average down the novice trader
might by another thousand shares at $30 to lower the average
cost per share that he`d already purchased. So, his average cost
per share would now be $35.
Unfortunately, the share price may fall even further, and the
novice trader will again buy more
shares to reduce the average
cost per share. They end up buying more and more into a share
that`s losing their money.
Now, imagine this Forex trading strategy being applied to a
portfolio of assets. In the end, all the capital will
automatically be allocated to the worse performing assets in the
portfolio while the best performing assets are sold off. The
result is, at best, a disastrous underperformance versus the
market.
If a trader uses an averaging down system and uses margins,
their losses will be magnified even further. The biggest problem
with this Forex trading strategy is that a trader`s gains are
cut short, and the losers are left to run. My advice is - never
average down. The process of buying a share, watching it fall,
and then throwing more money at it in the hopes that you`ll
either get back to break even or make a bigger killing is one of
the most misguided pieces of advice on Wall Street. Never be
faced with a situation where you`ll ask yourself, Should I risk
even more than I originally intended in a desperate attempt to
lower my cost and save my butt?`
Instead, design a simple, robust system with good money
management rules. I can practically guarantee the results will
be better than averaging down.
Discover BIG profits from the market by downloading your FREE
copy of David's new Ultimate Forex Trading Systems course. http://w
ww.ultimate-trading-systems.com/forex.htm
About the author:
READ my articles; you'll FIND the most powerful insider trading
plans & tips ever put together. Searching for these on your own,
is a needle in a haystack (hard to find). I trade everyday & my
progressive efforts found the perfect trading card, a set system
& plans that really work. These online trading systems are
unbelievably powerful, lucrative, reliable, yet simple to use.
Until recently, I've kept this formula to myself. NOW, I reveal
all.
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