As you probably well know, a lot of stock and even Forex traders fit into the category of the “over cautious” trader. These are traders who try to stake their entire trading existence on small, incremental profits all the time. You will know these types of traders for their very tight stop losses… but don’t go thinking that playing it safe is going to keep you from losing money.

Money lost is money lost, and if you have a talent for the Forex market at all, playing this “tightly” isn’t ever going to make you any money. On the contrary, you are going to end up losing on your deposits because the amounts you DO make will be so tiny that they will not pay for themselves. Do you think I am exaggerating? Not a bit. It is a lot like the poker player who uses a betting system - if he never lets himself lose, how can he? Well, this is a common misconception.

You WILL get lucky sometimes, but there are other times when the only thing that is going to keep you from being totally wiped out on the Forex market is one, good, educated decision to trade larger amounts. You see, small increments may inhibit you from losing big, but they also inhibit you from winning big.

So, stop being overly cautious. Don’t throw caution to the wind, but learn to have confidence in your decisions. If you have done your homework (which you should, before ever trading on the stock or the Forex markets), then you have a right to be confident in it. If you make a bad decision, so what - you can make it up, because you should never go all or nothing - but being cautious can cost you in the long run if it goes too far.