Effective stock trading education brings in profits for life. Not only does good trading education build wealth- the right trading system will also allow you to enjoy the most limited resource of all- Time. Trading in Exchange Traded Funds (ETFs) allow you to take advantage of unique opportunities. But the key to lifelong profits with trading is first learning to become a smart trader.
That’s why many new, but well read traders are turning to ETF trading. Getting stock trading education from “Big A” is a great place to start.
So, who is this “Big A”?
“Big A” is the nickname given to the man behind the ETF Trend Trading System. As a professional money manager and now multi-million dollar earner, Big A made his name by making $50 million trades. His big trades (not his size) earned him the nickname.
In addition to the trading course, “Big A” puts out an ETF newsletter designed to inform and give solid stock trading education for profitable ETF trading. In the newsletter along with additional resources, you’ll find information on trading psychology, money management, exits and entries, stop losses, and more. I find the guidance on money management in his ETF Newsletter to be especially valuable. As any professional trader should tell you, the key to growing your profits is good money management.
Anyone who says you can risk 5% on your trades is “not looking out for your own good or they’re just ignorant.” — “Big A”
And they’re certainly not the ones you want to get stock trading education from. Professional traders recommend risking a maximum of 1-2% of your account. For a $10,000 account, that would be $100-200. That means you would need to set your stop loss (never trade without a stop loss) in a position that limits your loss to a maximum of $100-200. Good money management keeps your risk consistently low.
Think about this for a minute. If you lose 5% on a trade, it doesn’t sound too bad. You can recover from that, no problem you say. But what happens when you have a 5-trade losing streak? If you risked 5% of your original capital on each trade, you’re only down 25%. Okay, that sounds big, but you can get out of a 25% hole, right? Hold on! To recover a 25% loss, you would need to have gains on your current capital of over 33%! And what’s worse, statistics tell us that a 10-trade losing streak will happen someday. What does that mean? You need 100% gains to recover!
Now relax and remember that you only risked 1% on those 10 losing trades. You’re only about 10% in the hole, and you only need about 11% gains to recover. And if you’re using a good system, you could be making over 6% per month. With the proper money management, you can recover from even the most unfortunate of times.
So you’ve set a stop loss to risk a maximum of 1, maybe 2% on your trades. That should do it, right? Well, setting a stop loss just based on your maximum is not what you want to do. Don’t ignore the market when setting your stop loss. You can’t control the market. It’s important to coordinate what the market is telling you and your maximum risk. In the ETF Trend Trading System, “Big A” teaches traders how to risk only 1% per trade. And he does it in a way that matches the market.
Too many new (and even “experienced”) traders think that they’re on the road to success simply because they’ve memorized a way to read charts. It’s just not enough. Good stock trading education has to utilize good money management.
“Big A’s” ETF Newsletter goes even more in-depth into the strategy of ETF’s. You can find information on money management, risk-reward ratios, reading charts, and more about ETF trading, all with a free subscription to the ETF Trend Trading Newsletter. Get the stock trading education you deserve to insure lifelong profits!
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Check it out: Secret Stock Trading Education – ETF Trend Trading System
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