If you have an online currency trading strategy, then you should incorporate the advice given in this article to make larger profits – and maybe even change a losing system into a winning one.

The advice we’re giving here is contrary to nearly everyone else on this subject – keep in mind but that 90% of traders lose! So, let’s stay away from the losers and make some profits.

Get Set for Larger Profits

So, what’s this insider secret anyway? – It’s about looking at money management in a different light.

Money Management and your Odds of Success

Most traders are virtually guaranteed to lose – because they have money management strategies that ensure they are constantly going to get stopped out by normal market volatility.

For example, many traders risk say 2% of their equity on a trade. On small accounts, this amounts to just a few hundred dollars. They enter the trade, and market volatility ensures their stop is hit. The market then goes back in the direction they had anticipated – and piles up thousands of dollars! Our trader though, thinks he was just unlucky – and tries again, but he wasn’t unlucky, and volatility will take him out every time.

Money Management Guaranteed to Lose

A string of small losses soon adds up, and the trader runs out of money – and his online currency strategy is at an end.

The trader may have been right, on where markets were going – but got stopped out of the trade – and finished up losing instead of winning.

Does this sound familiar? – It happens all the time.

How to Protect Equity and make Larger Profits

Here are seven tips to incorporate into your currency trading strategy, to protect equity and build huge profits.

1. Don’t listen to advisors or brokers. Advisors don’t care if you win or lose – and brokers certainly don’t mind, as they work on the assumption you will lose anyway. The more commission a broker makes the better – and tight stops ensure this.

2. You need to risk more per trade – so you need to be very selective in trades. Forget day trading, and concentrate on the huge, longer-term trends.

3. Keep in mind this truism – “with risk goes reward”. Without risk, there cannot be huge rewards. Currency trading offers huge rewards – but you have to be prepared to take the risk.

4. Taking a risk with no thought, and taking a calculated risk, is entirely different. If you are taking a larger risk, you are not necessarily going to lose – it depends on the logic behind the trade – and the profit potential. That’s why you should trade sparingly – and concentrate on the huge trends.

5. Use up to 10%, or maybe even more, on the trades you are confident in – these are the huge moves – and you don’t want to be stopped out!

6. Don’t go stops up too quickly to protect equity – huge currency trends last months or years – so give the trade room to go. You don’t want to get into a huge trade, and get stopped out on the first correction – if you reckon the trade is going to be huge, then have the courage of your conviction.

7. Use options as a vehicle – they’re fantastic if used correctly – to give you staying power. Use at the money, or in the money options – with plenty of time value, for greater staying power. Options are a fantastic tool, but NEVER buy out of the money options – or options that are close to expiry.

An online currency strategy consists of a number of components – and the one that lets down the bulk of traders, is money management. They try so hard to avoid risk, but end up making it – and lose. Don’t make this mistake in your currency trading strategy – you need to take risks, pure and simple – and as the well-known, US general George Patton said:

“Take calculated risks – that is quite different from being rash”

The fact is, most traders don’t believe this – they end up making risk by trying to avoid it – and that’s why their currency trading strategies fail every time – don’t make the same mistake!