You have to understand the fact, making a consistent profit in the Forex market requires extensive knowledge. Majority of the retail traders jumps into the retail trading business without having any precise knowledge to trade. They rely on emotions and gut feelings and eventually lose a big portion of their investment. Today we will learn some of the key facts which will help you to protect your trading capital.
Never risk more than 2% of your account balance
Learning to trade the market is a very challenging task. Being a new trader, you should never risk more than 2% of your account balance. Some of you might think by taking a huge risk you can earn more money but in reality, this is not all possible. You have to follow the conservative trading method and trade the market with proper discipline. Things might seem easy at the initial stage but it’s really hard to control your emotions. Regardless of the quality of the trade setups, you should never risk any amount which you can’t afford to lose.
Never trade against the major trend
You need to master the art of trend trading strategy to become successful at trading. For that, you must have access to the best Forex broker Australia. Some of you might think you can easily cut down the trading cost by trading with the low-end broker. But the pro traders always prefer to trade the market with brokers like Rakuten since it they offer premium trading environment. If you can master the art of trading, you won’t have to think about the trading cost. Think twice before you execute any trade in this market. Use the daily or weekly time frame to know the overall picture of this market and you will eventually get better at trading.
Trading with a complex method
The rookie traders might think a complex trading system is the only way to make a profit from this market. You have to understand the fact, success lies within simplicity. Try to create a simple trading system so that you can easily make a profit from this market. Never trade the market with a complex trading method since it will increase the risk factors to a great extent. Learn about price action trading strategy so that you can easily make a huge profit from this market. Never overload your trading charts with indicators or EAs. Focus on the manual art of trading and you will eventually become better at trading.
Stop trading the lower time frame
Those who are new to the trading profession might prefer the lower time frame trading strategy. Lower time frame trading is extremely risky and its nearly impossible to filter out the false signals. You need to analyze the daily and weekly time frame since it will help you to find the best possible trade setups. Being a rookie trader you have to understand the fact, patience has its reward. Without following the position trading strategy it’s almost impossible to make a profit from this market.
Never follow other people trading system
You can’t make a profit by following other people trading strategy. Every trader is different and you need to develop a unique trading system based on your personality. Never try to develop your trading strategy by using your real account. Open a demo account and test different technique to trade the real market. You will lose frequent trades but this should never make you frustrated. Demo accounts are offered to the retail traders to learn the art of trading. Use them properly and create a balanced trading strategy to make a consistent profit.