The most important component of a trading system is how it manages risk. The typical investor has "all their eggs in one basket" - They are in the market long. No matter how much they may 'diversify', if the market takes a downturn, their entire portfolio is at risk.
The trader, however, has two important tools under their belt: they can manage risk, and they not only can buy products in the market (go long) but they can sell products in the market (go short) and make money no matter which way the market is going.
Here at Sabre Trading Systems, we also teach to never risk more than 1/2 to 1 precent on any given trade. When your money is in the market (or heavily invested in a particular sector or stock) your capital is at a much greater risk.
Let's look at an example from this week: From Monday through Wednesday the S&P Index lost 3.33% of its value. If you had $10,000 in an index fund, that would be a net loss of $333. (See chart below)
What would your portfolio look like if you traded that money rather than invest it?
Let's look at what happened this week for our members who trade the Forex market...
Seven trade opportunities presented themselves for a total of 11.86R. If you risked only a half a percent per trade, your account would be up 5.93%, or $593 on a $10,000 account. Even if you only caught half of these trades, you would be in a significantly better position (a $926 difference from the index investor!)
You can look at the charts of each of these trades below:
Yes, it takes practice to become proficient. That's why when you become a member of Sabre Trading Systems you begin with a step-by-step introductory course that helps you setup your trading environment and learning how Sabre works, and then you can join us in trading live with our Crew three times each week for two hours per session building up your confidence in a simulated environment before you risk a single dollar of your hard earned capital in the live market.
I encourage you to dip your toe in the water by signing up for our free two-week trial. As they say, "the proof is in the pudding," and "seeing is believing."
I look forward to trading with you!
Other Resources:
Free eBook: The Change
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