Stops and Limits

A STOP is placed so that you don't lose too much money. For example, if I

bought EUR/USD at 1.1445, I would start losing money if it started moving down.

So, I might set a STOP at 1.1425 -- meaning, if the currency drops to that level, the

system AUTOMATICALLY exits the trade. I'm out 20 pips, but that's a lot better

than being out 40 pips if it starts tanking really fast (and this happens all the time, as

you have seen).

A LIMIT works the same way, only for gains. If I set my limit to 1.1535 on that

same trade, then later in the day (or the hour), when the currency moves up to 1.1535,

the system AUTOMATICALLY exits the trade, and I make money. This happens

whether I'm still at the computer, or down the street, or dead. THIS IS THE ONLY

WAY TO TRADE IF YOU’RE NOT GOING TO BE PRESENT TO WATCH

THE TRADE.

My system for trading relies heavily on three things:

1. Technical analysis - a ½ hour, 3 hour, daily, weekly, and monthly chart.

2. STOPS and LIMITS.

3. 10-pip goal every day. This requires DISCIPLINE.

If you started with $10,000 on January 1st, and earned 10 pips per day, and only

traded 17 days of the month, then you would end the year 2,000 pips UP, and with

about $130,000. For a spreadsheet that details this system, write me at

rob@robbooker.com.

If you continued the next year with 10-pips per day, the next year you would be

making between $10,000 and $17,000 per month trading (depending on your risk

tolerance). Can you do this? Absolutely. Can you do this today? Maybe, maybe

not. You have to dedicate yourself 100% to learning how to trade intelligently.