How to avoid losing money. Kind of important don't you think?

First, I apologize for not posting a blog entry in a good while. I've been dealing with some personal stuff that isn't worth putting into a blog you read to learn and profit from forex.

So book sales are going very well with Trajectory Forex. (For sale on Amazon or www.TrajectoryForex.com) That is a good thing. I have been giving some simple but very important advice to a number of people who've bought the book and gotten into forex trading. Seems to have been helpful to them, so I want to share it here. I think you'll find this, even as elementary as it may sound, extremely valuable.

The basic advice is don't lose money.

So okay, that sounds kind of obvious. But I kept getting e-mails, particularly from new traders, and they would tell me how they had been making money for a week or two with Trajectory. But then, suddenly, they got "trapped in a losing trade" and lost big. Rule one is NEVER lose big.

My number one piece of advice for anyone who starts in demo and then moves to a live cash account is to learn how to AVOID losing money. So I tried a new kind of experimental approach, and it's worked for a fair number of people lately. Thus, I am sharing it here. When you trade that first live account with Trajectory Forex (or any other method, honestly), you must start with one simple objective: trade for 30 days and do everything possible to simply break even. Your one and only goal for 30 days is to finish with exactly the amount you started with -- no profits, but NO LOSSES!!!!!

I am hearing and it seems that this can be about the most valuable 30 days in a forex trader's life. Because you learn how NOT to lose money.

This is in my book. But I definitely didn't stress the point to the extent that it becomes mandatory for anyone and everyone starting out. But you should NEVER feel like you're "trapped" in a bad trade, or sit there watching a trade go against you wishing and hoping it will turn around.

Listen. I understand how that happens. When I first started trading forex, I would double or triple up an initial account but then routinely get "trapped" in a losing trade and suddenly there's a margin call. It's wishful thinking and the eternal optimism that's just part of human nature. But it's also a flaw in how technical analysis is taught and the general absence of teaching about money management. Everyone works so hard at trying to teach people how to identify trends to make profits. But the broker classes and forums don't spend enough time on teaching you how to avoid losing money.

So, when  you inevitably find yourself in the middle of a trade turning against you, you still feel like you've read every indicator correctly. In the Trajectory Forex methodology, you have likely seen every indication that a currency is absolutely moving in one particular direction. So, your emotions, your ego, your "hopes" may cause you to ignore a retrace for too long and try to ride it out. Your emotions tell you that it "should" turn around in your favor. It "must" turn around. How can a currency be on track in one trajectory with such high velocity and then just reverse????

Well, the reason (especially today) is government intervention in many cases. One government or another steps in every single day to manipulate currency values. There's a big deal being made today about the Chinese government's manipulation of currency. Really? Is the United States going to claim it doesn't have a massive daily budget specifically to prop up the USD? Please. Every nation is manipulating currencies, and I strongly believe (no evidence of this, but it is my belief) that nations combine forces to collaborate in currency manipulation together. That's something like conspiracy to commit fraud. Right? Unfortunately, since laws are made by governments and it's the governments doing the manipulating, there aren't any higher authorities to police this currency manipulation.

The good news is that you can still make money if you watch only the physics of price movement as taught in Trajectory Forex. Don't get caught up in misleading fundamental or technical indicators. Trust only the numbers and move with them.

No currency manipulation lasts. The market is too big for long term interventions to endure. There's not enough cash in any government's reserve to prop up a currency long term. But they can sure screw up your proportionately little account and it's relatively small margin in a brief matter of minutes or hours. Of course, other things can happen. Bottom line, the only thing we can count on in forex is that price keeps changing.

So what do you do? You get out of losing trades. You keep a tight stop loss, which for me is now down to just 10 pips. It might even be less depending on the size of account your trading. You will lose some trades this way. It's going to happen. BUT, if you implement the trajectory methodology correctly, then you should win more than you lose. You should identify winning trend trajectories that run longer than the spread and produce profits. And you have to minimize losses in order to make sure you don't have some monster deficit to make up in a magical series of big wins that likely never materialize.

If you manage your losses. Keep every loss small. Then you can trust that you're not going to have some incredible streak of getting into trades EXACTLY when they reverse over and over and over. It's not going to happen.

This is a brutally simple way to trade. Honestly, you don't even need my trajectory methodology and its pure  physics-based approach to implement this kind of trading philosophy. You could merely flip a coin and make profits with high level money management. If you always lose as small as possible. Keep a quick trigger finger on your trades. And maximize the winning trades riding out every trend for as long as you can, and sticking with them as profits build (increasing the amount you're willing to lose or give back as your profits mount)...you'll quickly find yourself winning a lot more than you lose. And I include a formula for riding the winning trend in the book as well relative to how much you should be willing to give back in the inevitable retraces that hit during every trend.

I've had conventional technical trading professionals tell me they can make a profitable living winning less than 40% of all their trades. What is that about? It's about smart money management. Winning as big as possible when you get it right. Losing small -- and NEVER losing big.

So, simply put, my advice to anyone who's starting out in forex is to invest 30 days in demo and the first 30 days in your live account just trying to break even. Learning how NOT to lose money is the most valuable skill possible in forex. In today's market, you're forced to scalp more than ever before, so making quick moves is more the routine than ever. That's okay. As long as currency prices move one direction or another, profits can be earned. THAT is the fundamental reason I personally believe forex remains the single best market for making money. When you simplify it down to basic physics -- the math behind the moves with disregard for misleading world events and technical indicators that can't be trusted -- with physics you will pick more winners than losers. With smart money management, you should NEVER NEVER NEVER lose big.