The Reality Beginners Need to Understand First
Most forex beginners lose money because they start trading before fully understanding how forex trading works. Updated January 2026 by Brian Rosemorgan, retired forex trader with 8 years experience. Learn when to trade forex.
Forex Risk Management: Your Shield
Risk management tells you how to survive. Follow these steps:
- Risk 1-2%: Never lose more than $100 on a $10,000 account.
- Logical Stop Loss: Place exits based on market structure, not random numbers.
- Reward Ratio: Aim for 1:2 (Win $200 for every $100 risked).
A Real Example (The 1% Rule)
If Sarah has $5,000 and risks 1% ($50), with a 1:2 ratio, she wins $100 or loses $50. She only needs to be right 34% of the time to be profitable.
Ready to Practice Safely?
Before risking real capital, successful traders use demo accounts to master their emotional discipline and strategy execution.
Last updated: January 2026
Written and reviewed by Brian Rosemorgan.