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How Effective Leverage Affects Forex Profitability
Many traders focus all of their energy on finding the right entry and exit signal but still end up losing in the end. Today, I want to illustrate how two traders (Bob and Ed) place the same trading signals in their Forex account, yet end up with different equity amounts. To keep the illustration simple, let’s look at a two trade series. Each trade has a 100 pip stop loss and a 150 pip profit target. The traders will lose on the first trade and win on the second trade. When you see the results on a score card, it would look something similar to this: At the surface level, it looks like this trader is doing well. ... (full story)