your trading balance.

“Well what about what you teach in your eBook Forex Freedom?” Obviously if you are following that plan you would be breaking the above stated 2% rule. That is true, but in some circumstances rules are meant to be broken. When your account is tiny, as it would be if you started with a meager mini account, you would simply have to break the 2% rule otherwise you couldn’t even trade. Think about it… 20 pips (stop & limit) is just about the smallest trade you could possibly engage in (don’t argue with me that you’d scalp trade for just 10 pips), so the above rule could only be followed if you had a minimum of $1,000 in your trading account! (Explanation = 1 mini lot x 20 pips = ~$20 which is 2% of $1,000). “Forex Freedom” was designed to quickly accelerate account growth by taking greater risk in compensation of quickly turning an insignificant amount of money into something significant. Face it, if you were to loose $300 due to highly leveraged trading then “so what”. I apologize to you if that was insulting to you because $300 could be a seemingly significant amount of money to you… but come on, it really is chump change. What is important to notice about what was taught in that eBook is that once you reach $10,000 you are then scaled close to an appropriate 2% risk limit, and after $30,000 you should DEFINETELY stick to the 2% rule. It is also important to remember that in that eBook I refer to making trades with a 20 pip stop loss, so if you start trading engaging in trades with larger required stops then you MUST adjust how many lots (mini or regular) you may trade. I should also state here that how you trade a mini account (in light of what I just said above) is also contingent of what your purpose is for trading it. If you are just trying to build up your account quickly then the above statements is fine for you. Some people, however, trade a mini account not because it is all they can afford to trade with, but rather because it is a training tool to practice proper trading techniques (including equity management). If this describes you then please do limit yourself to the proper rule of 2% (assuming you have enough in your account to be able to trade at 2%) while you develop your trading skills and disciplines. Later in “10% to 30% Monthly ROI” (bundled with this Rapid Forex package) I further discuss the upside of sticking to the 2% rule, because by following it (along with the trading strategies you’ve learned from me so far) you can easily make 10%, 30% or even more rather easily! Please listen to it as soon as you finish reading this chapter. Think about it… if you can manage to catch a 20% net profit per month (YES! IT IS REALISTIC) and let’s say you have a meager $30,000 in your account then you’ve made over $6,000. The

fun really begins once you’ve built up to over $100,000. Ok, so we’ve touched on one of the reasons when it is “ok” to break the 2% rule – when you have too little money in your account to be able to trade at 2%, or if you have less than $10,000 and are trying to build your account somewhat faster (following the “Forex Freedom” strategy). There are two other times when it’ll be somewhat ok for you to break the 2% rule. (1) Many of the techniques contained within this eBook, Forex Sailing, are designed to have significantly larger stops. Some of the largest stops condoned in this eBook would be up to 200 pips. Following the 2% rule this would mean that to trade just ONE mini lot you would need a minimum balance of $10,000. Here is your “permission” to bend the rules and let yourself go up to 5%… BUT PLEASE USE THIS WITH UTMOST CAUTION!!! Only trade at 5% when you think that the opportunity you are looking at is superb. Try to limit yourself to “allowing” yourself this luxury to just once a week MAXIMUM!!! Really “cherry pick” your trades. (2) Some of the techniques contained in this eBook are to enter into trades that should last for long periods of time. Different traders would define “a long time” differently. I define anything lasting over a week to be a long-term trade – some traders (position traders) would laugh at me considering a week to be “short term”. Well, some of the trades you’ll do will last for several weeks, possibly even months (obviously this would only happen if it is running profitably), and simple logic would dictate that the “set up” for such opportunities doesn’t happen every day, every week, and not even every month. Because such trades happen rather infrequently many traders increase their percentage to better capitalize on those rarer opportunities. Some traders go as much as 10% (there are even other eBooks on the market that teach going for higher – just stupid), but generally speaking I like to go higher leveraged into those trades to a limit of 5%. Yes, the risk for the trade is higher, but generally speaking when engaged in such a trade you are shooting to score multiple times your risk, so it is worth it (risk to reward ratio of 1:2 or better). Remember, as stated above, this is a rather rare event that doesn’t happen every week. Let’s wrap up this discussion about “Equity Management” for “Forex Sailing” by summing up the important points we’ve covered. Your stops must be set at prices not based on what you can afford to

loose, but rather based on strategic levels, or price points, that indicate to you that your assumptions about the direction the market will move in were wrong. THEN based on proper equity management principles you decide how much you can stand to loose on that one trade. Then based on the required stop size and based on how much you can afford to loose (according to proper equity management principles) you decide how many lots you may commit to the trade. Never EVER trade without a stop loss! Protect your account from losses as the deeper down you go the harder it is to just come back to break even. Even with a stop set still be cautious of significant Fundamental Announcements (i.e. “Freaky First Fridays” of each month). Limit yourself to only risk a maximum amount of 2% of your equity on any single trade. Except for the following circumstances… o If you are following the rules set in “Forex Freedom”. o If your account is less than $10,000 you may ONCE A WEEK (maximum, but preferably less often) risk up to 5% to go after larger trades requiring larger stops. o Once in a long while when there is a great set up for a potential long-term trade you may trade up to 5%.