Blake Morrow is the CEO and co-founder of ForexAnalytix. He spent the majority of his professional career as the Chief Currency Strategist for Wizetrade group, and then as the Senior Currency Strategist for Ally Financial. Blake has over 20 years of trading experience and has been a co-owner of a Dallas-based brokerage firm and LiquidTrader Technologies. He spent over 14 years hosting a popular Forex and trading online show, “The Morning EDGE”, where he spent his day trading with and teaching other traders to navigate through the markets. Blake is a seasoned individual investor in both equities and Forex. He is a husband, father, avid golf hacker, and a proud Marine Infantryman (3rd Battalion 9th Marines, 1990-1994). In this episode of How To Trade It, Blake discusses volatility and the importance of good risk management. You don’t want to miss it! @PipCzar states that the first thing to do when you find yourself “in a hole” is to drop the shovel and stop digging. Tune into this episode of How To Trade It to learn more! #Forex #Equities #Currencies #HitTheBid #Securities #PipCzar… Click To Tweet

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You’ll want to hear this episode, if you are interested in…

  • [00:52] What kick-started Blake’s career
  • [06:20] Fractionals
  • [07:11] Like winning the lottery
  • [09:44] How NOT to manage risk
  • [11:00] Lack of liquidity
  • [14:05] The most important question you can ask
  • [16:47] Size matters
  • [22:30] Approaching the market differently
  • [24:14] Reconstructing everything
  • [27:17] Trade in a positive manner
  • [31:05] The problem with social media
  • [33:15] Swing trading
  • [36:59] Volatility
  • [39:30] Weekly strategy
  • [41:32] It’s like playing chess

 

The break that jump started my trading career

After serving as a Marine, I started college and was working in a bar and retail sales. My friend, however, was making decent money as a stock broker. One day, he suggested that I should become a stock broker too. The problem was that I knew nothing about trading. He encouraged me to apply for an open position anyway, because of my stellar sales ability and track record. Unbelievably, I got the job! By the mid ‘90s, I found myself living off of my savings and existing on Ramen and PB&Js. Not really a great place to be. At some point, my buddy and I each got $50,000 from an investor, which I quickly took down to $20,000, in about six months. Then one day, it was as if I hit the lottery. I found a stock that was trading at around $8, and it quickly went to $120.  I had some big positions and FINALLY made some money which then allowed me to actually start trading at a more serious level. Fractional shares saved me!  They were everywhere, and they made scalping a lot easier.  You could buy 2,000-3,000 shares of Amazon, spin in and out for like $0.50, and make a quick $1,500.  Do that a few times a day, and you are on the right road to success.  It was momentum-based trading at its finest, and absolutely everything was going higher at that time. Buying breakouts was so easy. But, we all know that the markets change, and it doesn’t stay that way for long. Unfortunate events, like the dot com bubble burst or 9-11 happen, and everything comes to a screeching halt.  

 

Risk Management

Like many traders, when I first started, I only cared about the profits. I wasn’t concerned with managing risk, and I definitely didn’t have a plan in place to deal with it. With 20+ years of experience, now the FIRST thing I want to know is where my risk is. Since I’m managing a community of traders, and not just myself, I try to keep risk management at the forefront of everyone’s mind.  You have to essentially start backwards. Before even taking a trade, you need to ask yourself how much you are willing to risk. After you decide that, you can look at your charts, the environment, the macro backdrop, etc., to see if you can actually double, triple, 5x your money, if things work in your favor.  Ultimately, you just want to make sure that the “reward” has the ability to go further than your risk, even if you don’t stay in the trade long enough to reach the maximum gain. Your position size should be driven by the way that you trade, the time you are willing to put into the markets, and how much focus you are going to spend on managing your positions.  

  

Resources & People Mentioned

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Disclaimer: Trading carries a high level of risk, and may not be suitable for all investors. Before deciding to invest you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment. Therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. 

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