Getting Started in Currency Trading, + Companion Website: Winning in Today's Market, 4th Edition

Chapter 19

The Dagger, the Waltz, and the Line

Introduction

YOU ARE HERE—This is a long chapter; take your time. It corresponds with the idea that money management is more important than any trading technique. Study the material here while you continue to develop your own trading method and setups and while considering the use of the Goodman Method, either independently or in conjunction with your own discoveries. Endeavor to use your trading and learning sessions for a single task. Multitasking may throw you off the horse at this juncture.

This chapter continues the PTS walkthrough of the AUD/USD. Here you will see the Goodman techniques for money management—entry and exit as well as stop-loss. The chapter begins with a discussion of risk, and then details the dagger. After finishing the walkthrough, the line concept is introduced.

Charlie felt money management was a bigger key to success than any particular trading method used. He went so far as to postulate that a simple charting technique using the BMP would be very effective in the long term if the trader had excellent money management skills. If you search for forex on Amazon—www.amazon.com—you will quickly see the vast majority of them are on trading techniques, methods, and systems. Most of those are related to technical analysis. The market is simply responding to demand. And the demand from most traders—especially new traders—is in learning a trading method. As we know, most lose; FOREX is very undemocratic.

Tip: The ...