August 24, 2010 Update
Since May 21, Leah trading system has accumulated over 2,000 pips in profit. If you started out trading with $5,000 and traded one mini lot i.e. 1 pip = $1, then your return on investment will be 40%. Let’s image that you started with $5,000 and Leah losses 2,000 pips. This means that your account will only have $3,000 left i.e. 40% drawdown. With a 40% drawdown, this is considered as aggressive for most traders.
Let’s say that you started trading with $10,000 and traded one mini lot with Leah. With Leah winning $2,000, your return on investment will be 20% (2,000/10,000). Now imaging instead of winning, Leah lost $2,000. This means that your $10,000 account will only have $8,000 left. This is a 20% drawdown on your trading account and is considered acceptable to most traders.
Both examples above demonstrate that risk and reward go together. The higher is your risk, the higher is your reward. Unfortunately, most unscrupulous marketers have promoted Forex as a high reward investment whereby they have conveniently left out the high risk associated with it. I get numerous emails per day on forex trading systems with outrageously claimed returns. It is sad as there are new traders still failing preys to these scammers.
Remember to focus to obtaining reasonable return per year. Any returns over 40% a year is a disaster in the waiting. Regrettably most traders are starting out with $500 or $2,000 capital which makes 40% return per year unattractive. 95% of traders lose money not because they are under capitalize, it is because they are hoping to turn their $500 account into $2,000,000 per the Forex advertisement claims.
The take away of this lesson is that risk and reward go hand-in-hand. In order for you to turn your $500 account into $2,000,000 account, you will take enormous risks. You are more likely to blow up your account before you can ever reach your goal of $2 million.
Presently, Leah is in 3 EURUSD buy trades with a floating loss of -62 pips. See attached chart.
