How to Protect Your Capital

In this video:
00:46 – You must preserve your capital
01:08 – To help as many traders as we can
01:37 – 10 years of profitable trades on our membership site
02:51 – Forget about making pips
03:17 – The problem with most traders

Looking to protect and preserve your capital is key to becoming a good trader. Let's talk about that and more right now.

Hey, Forex traders, Andrew Mitchem here at the Forex Trading Coach with video and podcast number 343. I thought I'd come outside today. We're still in Cambridge in the North Island. Cherry blossom throughout the entire street, absolutely beautiful in springtime this time of year. We're moving down to Nelson in the South Island at the beginning of December. So while here, I thought I'd just come outside and take advantage of this. So, if you are on the podcast, sorry, but you can't see the beautiful trees behind me.

You must preserve your capital

Let's get back to the topic in hand about preserving capital. You see, most traders lose capital. It's hard money that you've earned to get into your trading account. Why blow it? Why do stupid things to throw it away? As traders, we've got to understand that we're in a business here. You've also got to understand that the stats suggest that about 90% of traders lose money. So, here at the Forex Trading Coach, we're about turning that around.

To help as many traders as we can

Our mission is to help as many traders as we possibly can. And our mission, also, is to help traders preserve their money, preserve their capital, so they can enjoy trading and understand and gain the benefits that trading offers, but only once you understand and know what you're doing and have confidence in your strategy.

There's many things that we do here at the Forex Trading Coach in order to help our clients, not only have a strategy, of course that works, is that we post daily trades each day of the week.

10 years of profitable trades on our membership site

And over the last 10 years I've been publishing those trades every single day for 10 years of the trading week. And do you know, not one single year have we lost money? Every single year for 10 years we have been profitable.

Now, the power of compounding, and you probably know about it. If you took $100,000 back in February 2010 when I started posting those daily trades, today here into November 2019 your $100,000 with compounding, and only risking half of 1% of your account per trade, your $100,000 would now be worth 1.65 million. Quite outstanding considering they are all trades that have been published. They're all trades that take about maybe 5 to 10 minutes once a day for you to put on your platform. And it just shows the power of compounding, the power of high reward to risk trades and the power of low risk per trade.

And that's, again, comes back to preserving capital. Because we have live webinars. In fact, I'm holding one tonight for clients in the European session. It's night my time. We have trades posted on our forum site. We do all these things that we can to help clients understand what good trading is all about, and to actually help them to earn while they learn.

Forget about making pips

But the other thing is, of course, you never hear us talking about pips. Never do we talk about, “Oh, we've made this number of pips,” because it really doesn't matter. For us, it's about having low risk per trade. In other words, a half percent risk per trade maximum. High reward to risk. So, if we're making a three to one, let's say, it means we're risking half a percent and if we have profitable trade, we make a 1.5% account gain. And that is really, really important that you can do that.

The problem with most traders

And also, there's a phrase that someone told me the other day, and it's a really good phrase. And it was about the problem with most traders is that most traders, unfortunately, they lose their money like they're on an elevator and they gain money like they're on stairs. In other words, big drops, small incremental gains.

And what we need to do and what we try to do here at the Forex Trading Coach is to turn that around. It's really important that you do that. It's really important that you have high reward to risk trades, and it's really important that you gain like an elevator, good fast gains. And then when you have losses, which we all do, we have small incremental losses. Small losses, big gains. And that's what good trading is about, that's how you protect your capital.

So I hope that helps. Once again, this is Andrew Mitchem here at the Forex Trading Coach. I'll see you this time next week with more trades and information to help you becoming a great trader. Bye for now.

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© 2020 The Forex Trading Coach Ltd (NZ FSPR:FSP37396) provides general information and educational courses and materials only. This is not an offer to buy/sell financial products. We do not provide personal advice nor do we consider the needs, objectives or circumstances of any individual. Financial products are complex and all entail risk of loss. Over-the-counter derivative and foreign exchange products are considered speculative because they are highly leveraged and carry risk of loss beyond your initial investment, hence should only be traded with capital you can afford to lose. Please ensure you obtain professional advice to ensure trading or investing in any financial products is suitable for your circumstances, and ensure you obtain, read and understand any applicable offer document.

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