The Perfect Risk Avoidance Trader
Tip: At the end of the day, if you are like most traders, you will find the small profits are consumed by the small losses, for the most part.
You want to be a risk-avoidance trader. Always consider the risk involved before executing a trade. Make sure as many of your trading method ducks are in line before hitting the buy or sell button on your trading platform.
Tip: It is better to miss a winning trade than to make a losing trade. There will always be another opportunity, but once you lose -- the money is forever gone. Good traders sit on their hands much of the time -- waiting for just the right opportunity, and patiently waiting to get the most out of it.
Mr. Goodman was constantly talking about his "Belgian dentist." In Europe, Belgians are considered to be very conservative investors. In the United States, that accolade often has gone to dentists. The perfect risk-avoidance trader is then a Belgian dentist!
Tip: The risk-avoidance rubber hits the FOREX road like this: Move your S/L to the breakeven price as soon as possible. Profits begin at breakeven; endeavor to get to the latter before thinking about the former.
The Goodman approach to money management begins with entering a trade once the setup has been qualified. This is called the dagger entry technique.
By Michael Duane Archer