June 14, 2018 at 12:51 #5019
All the people who are investing their money in Forex has one thing in common. They are all trying to get some strategy that will reduce their amount of losses. It is not easy to get your dram formula but this article can certainly help you with some useful tips. Making a profit in this industry is hard but what is harder is keeping thee losses within your limit. Most of the losses exceed our account and many traders lost their capital. This is not how you should trade the market. Below are some tips that we have found useful in our career. If you can follow these tips with discipline, you can expect your losses will be minimized.
Trade with low leverage
Leverage trading is one of the easiest ways to maximize your profit. Those who are relatively new to the trading profession don’t know the perfect way to use the market leverage. They are always taking a huge risk and losing a significant portion of their investment. But have a look at the senior traders in the United Kingdom. You will be surprised to see their depth of knowledge. Being new to this industry you should never use more than 1:10 leverage. This will stop you from taking a huge risk in each trade.
Daily time frame trading
The new traders are losing more trades since they trade the lower time frame. But have a look at the experienced professionals. They are simply using the daily time frame and executing quality trades in favor of the market trend. You need to learn the perfect way to spot the best trade setup in your online trading platform. Unless you educate yourself with the proper knowledge of Forex market, you will never become a successful trader. Try to avoid lower time frame trading as it will significantly increase your risk factors. Follow the conservative style and you will see dramatic improvement.
Trade with small position sizes
The first way to minimize the losses is to trade with small positions sizes. Positions sizes are an important tool when it comes to determining the number of risks you are about to take. Set it big and your account will be washed away. If you set it too small, it needs a lifetime to make even a one dollar profit. This position size should be set with analyzing the trends and your accounts. If you think the pattern is going to favor you and you had past experience of making big amounts, you can set big positions sizes. We suggest to always set small position sizes in your trades.
Use leverage only when you are confident
Leverages are both a blessing and a curse to Forex traders. They think they have the chance to trade like big players and place an unrealistic trade with huge leverage. Most of the time these trades favor rarely and they lose their money. If you are one of them who is overconfident in their own strategy, do not use leverage. You do not know that it is a double-edged sword. If used right they make you rich and if not you are finished. This is better to skip risky chances than trading with leverages.
Always set stop-losses
People only focus on their strategy and their analyses and they focus to set stop-losses. If you set stop-losses, the trading platform will make sure your trades are automatically closed when the prices go down. It will keep the money in your account and you can be rest assured not to lose your investment. Have some gap between the stop-losses and your opening price, you do not want your trades getting closed even with normal volatility.
Never risks in the percentage of your account
Always take risks in money, not in the percentage of your bank account. This is how you are going to survive in this investment industry.
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