Hello Friend !
I am sharing few points that you should need to know to earn consistent profit in forex.
Ultimately there are 5 possible outcomes of any trades and these are:
We need to focus on out of these possible outcomes to earn consistent profit?
Here comes the Risk Management, as you know risk management is all about minimizing the loss and maximizing the profit, Right? And that is exactly the Next Image tells us ..
We need to avoid the small profit and big loss and focus all of our attention on big profit and maximizing our gain on winning trade.
Have a look on the example below
If our winning trades are 50 @ an average profit of $3 per trades then we are making 50x$3 = $150
Mean while we have 50 small loosing trades @ an average of loss of $1 per trades then out total loss is 50 x $1 = $50
And the Net profit we get is $150-$50 = $100
That is how we can get consistent profit.
Now, look at the another example:
This is what we should avoid because here we are making small profits but the big loss totally outweighing the profits. This situation will results in Consistent loss
Now look at the another outcomes called Break Even
Here we are focusing on small profits by cutting our winning trades too early but at the same time we are getting small losses as well.
In this situation these two outcomes will cancel each other out.
You are not Making a profit or losing money.
We are not really making money and not really loosing either, we are breakeven and frustrated.
Look at the below picture and decid what you should have to do