One beginner takes a course in driving before he ever gets inside the vehicle. He probably makes it to the subsequent town too, perhaps after one or two wrong turns, perhaps with a couple scratches on the paintwork, perhaps a little late, but he arrives in the final analysis.
And remember, that was the same automobile. In the same way we are able to take the same currency exchange system, give it to 3 different traders, and see 3 different results. So what will we need from a currency trading tutorial and other foreign exchange courses? Just like with the drivers, knowing how to operate the system is only a small part of our coaching. Risk management is what’s most likely to preclude us from finishing up in the ditch.
We’ll take an example. Say you have a system that makes a median of fifty pips profit on winning trades and thirty pips loss on losing trades, including the spread. It’s clear this is a good system. It should make profits in the long run.
However, if you start out thinking you have got a fifty percent chance of success so that you can risk 50% of your funds on each trade, you’d be making a gigantic mistake. Fifty percent winners doesn’t mean that every loss will be followed by a win and vice versa. There could be two, three, four, perhaps occasionally even ten losses in a row. Or you could have 5 losses followed by a win followed by another 5 losses. Money management is something that has to be learned by any beginner trader. You can see from this text why it’s important to take a currency trading tutorial of some type before starting trading.