Hello all,

It is summer, holidays and so on… so this blog took things light lately. I felt that before I trade I need to learn more. As I said before I read a great book by Dr. Alexander Elder – ‘Come into my trading room’

It is a great book with many tools and advices. It is really good for beginners as it will save you lots of mistakes. I am trading for a while now and I love it, but reading this book I recognised all the mistakes I did. I wasn’t alone…

In the past I read that stop loss can kill you. Dr. Elder says the opposite. Not using stop loss will kill you. And I think he is right. My point was that no mater which level you enter and no mater which side you choose (buy or sell) the market sooner or later will come back to you.

Dr. Elder says that maybe I am right, but by the time the market comes back you, you account has been wiped completely. It happened to me with RBS that wiped my account and I had to start again after a break thinking what went wrong. This is even more important when using spread betting because you leveraged product so you may loss more than you account.

The system that Dr. Elder offers make a lot of sense. In fact I’ve read it in other places as well. It is quite simple but will protect your account from disasters. Never trade more than 2% of your account and never be exposed more than 6% of your account.

And be strict with yourself. Never say this time is different so I will raise my stake. It is not easy but this will give you the edge.