Open position in forex meaning

The Authority’ on Price Action Trading. In 2016, Nial won the Million Dollar Trader Competition. This post was written to expose some open position in forex meaning and some myths surrounding the topic of managing your trading capital.

Most information out there on money management is completely useless in my opinion and will not work well in professional trading. I will warn you that what you are about to read is likely to be contradictory to what you may have already learned about forex money management and risk control in other places. I can only tell you that what am I about to divulge to you is the way I trade and it is the way many professional forex traders manage capital. Everyone knows that money management is a crucial aspect of successful forex trading. Yet most people don’t spend nearly enough time concentrating on developing or implementing a money management plan. The paradox of this is that until you develop your money management skills and consistently utilize them on every single trade you execute, you will never be a consistently profitable trader.

I want to give you a professional perspective on money management and dispel some common myths floating around the trading world regarding the concept of money management. Myth 1: Traders should focus on pips. You may have heard that you should concentrate on pips gained or lost instead of dollars gained or lost. The rationale behind this money management myth is that if you concentrate on pips instead of dollar you will somehow not become emotional about your trading because you will not be thinking about your trading account in monetary terms but rather as game of points.

If this doesn’t sound ridiculous to you, it should. This is one of the more common money management myths that you are likely to have heard. Which is not always the best course of action. There’s psychological evidence that suggests it’s human nature to become more risk averse after a series of losing trades and less risk averse after a series of winning trades, but that doesn’t mean the risk of any one trade becomes more or less simply because you lost or won on your previous trade.