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About the Author

Cynthia Macy

My name is Cynthia Macy and I've been trading various markets, including stock options and forex, for over 13 years. I have co-written and market three forex trading courses that are simple and step-by-step.
More about Cynthia Macy

“It is easy to demonstrate that MM is far more important than analysis.
A total lack of MM would mean risking everything on any one trade.

You might have the best analysis system in the world and get 99 straight trades
right but that 100th trade would wipe you out.

On the other hand you might have the worst analysis system in the world. If so,
a proper MM system will reveal this fact while at the same time minimizing the
risk to your capital. So if you get 10 straight trades wrong you still lose only 10% of your capital!

It is therefore immediately clear which is the more important. MM is what makes the analysis / system work, not the other way around.

Learning to trade in a demo account is necessary, practicing is necessary, but
when you start to play the game for real everything changes, if only because you start to hit emotional/psychological problems you never even dreamt existed. These problems can be overcome but when you enter a new arena (i.e. actually trading your new system/approach) then you must minimize your risk – indeed good traders minimize risk at all times.

So you don't trade 10 lots, you just trade one. Or you don't trade even 1 full lot,
you trade .1 mini lot. And you keep trading just one until your actual results
confirm that you should increase position size.

At that point your area of risk (new territory) has become more quantified and
you can move ahead a more relaxed trader. It would then make sense to
increase position size in appropriate steps. If your system had some flaws
then you do not lose all your capital and you also develop some discipline along
the way. What do you stand to lose? Just a little time. If all goes according to
plan you may well be trading at the size you originally wanted to just a few
months later.”

To order John Piper's book “The Way to Trade” (good for traders of any market), please click here:

http://www.the-way-to-trade.com/wayto/trade-108.php

(excerpt taken from John Piper's book “The Way To Trade”, by permission)

Byline:

Erol Bortucene and Cynthia Macy are co-authors of ‘The Day Trade Forex System: The Ultimate Step-By-Step Guide To Online Currency Trading’.
Visit:

http://www.daytrade-forex.com

for examples of actual trades using The Day Trade Forex Trading System. Learn how easy it is to learn to trade the lucrative forex market from your home pc.

For more comprehensive trading information, visit their other websites at:
http://www.successtrading2000.com
http://www.professionalforextradingonline.info
http://www.shortterminvestingsite.com