Always remember, trading is nothing but the management of risk. In every trade, traders take a certain amount of risk in the market. So, you should always risk only the percentage you can handle when you will lose in the trades. Don’t ever risk more by thinking that you won’t lose in the trades, losing is a part of trading. So, it’s not possible to always win in the trades even the pro trader doesn’t win all the time. Hence risk only the amount your trading account will be able to handle.
Thousands of retail traders are joining the retail community to secure big profits. Very few can make a consistent profit. However, the successful traders in Singapore are using a unique way to ensure their profit factors. They are relying on the basic concept of investment and placing the trades with low risk. Today, we are going to discuss 4 amazing methods by which we can change our lives as a currency trader.
Set proper stop-loss in the trades
Stop-loss orders play a crucial role in the Forex market as many other important factors depend on the stop-loss order. These factors include the position size, whether you should buy or sell and many more. Don’t ever place a stop-loss order in a rush as this will surely lead you to fail in the trades. Try to observe the market’s condition while setting a stop-loss order in the trades. Place your stop-loss order to the point where you are confident enough about winning, you can also lower your risk to a great extent by placing a proper stop-loss order in the trades.
Those who try to use mental stops should stop trading right now. The use of mental stops greatly increases the risk and makes the trading process much more vulnerable. Learn to trade with predefined stops to protect the capital.
The risk to reward ratio
The risk-reward comes after you have set proper stop and target in the trades to make profits. The risk-reward ratio acts as a filter in the trades as it doesn’t allow you to lose more in the trades. Never avoid the risk-reward ratio in the trades if you don’t want to lose more in the trades. Pro traders always set the risk-reward ratio at a lower percent so that the loss rate doesn’t turn out to be more. If you want to make profits in the long run, you should set the risk-reward ratio as at least 1:2 in the trades.
The top traders at the Saxo bank group always emphasize the importance of a high risk to reward ratio. They never encourage trade with a negative or 1:1 risk to reward ratio as it makes the trading process complicated.
Don’t let your emotions rule you
To make profit, the most crucial step for the traders must be to control their emotions in the Forex market. Always remember that emotion is considered as the biggest enemy of the traders, you won’t be able to stay in the long run if you trade with emotions. Naïve traders often trade by being emotions and thus they lose their trading account. Trade with confidence and by learning about the market as this will help you control your emotions in the trades.
Stop for a while if you lose continuously
Many new traders start their trading randomly and they place any trade they want to and this leads them to fail. A few traders don’t even stop their trading when they lose continuously in the trades instead of understanding their mistakes they start trading in the hope of making profits. You should always sit back for a while if you find yourself losing constantly and try to identify your mistakes so that you can rectify them in the next trade. Be confident and try to execute effective skills and strategies in the trades to avoid losing more.