This Forex trading advice can help you achieve an instant increase in profit per trade and also reduce risk. Its so simple yet, most traders don’t take it and lose…

The 80 – 20 Rule is a simple rule, which applies in many areas of life. In business it is frequently used to increase profits and states, that 80% of a company’s sales and profits, are likely to come from just 20% of its clients.

In terms of Forex trading it means:

80% of your profits are likely to come form just 20% of your trading signals.

If traders cut back there trading frequency and just focused on high odds trades, overall profitability will increase and risk will decease. Many traders however equate trading frequency with profits and this is a huge mistake.

A simple example of the above is the forex scalper or day trader, who trades a lot of times and losses, because he is trading random volatility and that’s a sure fire way to lose. Another group think they always need to trade a lot or be in the market all the time and they meet the same fate as the day trader.

You don’t get rewarded for effort or trading frequently, you get rewarded for your overall profits and that means cutting back your trading frequency.

I know traders who trade less than once a month and make triple digit profits. These traders don’t make a huge effort or work hard but they do make a lot of money. They have patience and simply wait for the high odds trades, hit them and hold them and watch there profits grow.

If you look at any Forex chart, you will see trends that last a long time – sometimes many months or years and by focusing on these trades, you can trade less and make bigger profits.

The 80 – 20 Rule works in many areas of life and works in Forex.

If you understand it and apply it, you can make bigger profits and spend less time on your Forex trading strategy.