Five ways to save your trading capital
Saving your trading capital is one of the most difficult tasks for Aussie traders. You may have extensive knowledge of trading business, still, you have to lose trades regularly. Those who have the skill to manage the risk factors efficiently are always making a profit despite losing trades. On the contrary, those who are taking high risk in trading are blowing the trading account. So, how can safeguard our trading capita? Well, there are hundreds of ways but we will discuss the top method to protect your trading capital. These are –
- 2% rule of money management
- Trend trading strategy
- Trading with the elite broker
- Control your emotions
- Developing your skills
2% rule of money management
Since the majority of the traders are losing money, trading is often regarded as the most complex business in the world. But do you know why the retail traders are losing money? They are using leverage in the wrong way. If you look at the experienced traders, you will notice they are not taking more than 2% risk in any trade. Making consistent profit is all about managing the risk exposure and trading the market with proper discipline. Instead of taking high risk in trading, you should think about the conservative trading style. You can take less than a 2% risk to ensure a stress-free trading environment.
Trend trading strategy
Trading against the trend significantly increases the risk. Being a fulltime trader in the options trading industry you should always think about the conservative trading technique. If you think trading is the best profession, you need to learn the importance of market trends. Very few traders understand how to trade the major trend. The rookie traders don’t know the perfect way to draw the trend. So, start using the demo account and you will eventually learn to trade the market with the major trend.
Trading with the elite broker
At times you might even get scammed in the Forex market. The only reason to get scammed is choosing the unregulated broker. As a trader, you should always find a reliable broker who has a proven track record in offering financial service. Never think you can beat the market without following the conservative trading method. And to trade with a conservative system, you must learn to trade the market with the premium tools. So, start researching so that you can source high brokers like Saxo. Forget about the associated trading cost in the high-end broker. Assess their offered service and you will be more than happy with the fees.
Control your emotions
Trading the market with emotions is one of the key reasons for which the novice traders blow up the trading account. If you intend to develop your career in the Forex market, you must learn to trade without having any emotional attachment. Learning to control your emotions is one of the most difficult tasks. The majority of the traders lose control and become aggressive after facing a few losses. The result of your trades should have zero impact on your mind. Only then you will be able to make a consistent profit.
Developing your skills
Without having the precise knowledge of technical and fundamental sectors, you can’t make a profit in the Forex market. The naïve traders think trading is all about making a profit. In reality, it’s all about saving your trading capital. Stop targeting 100% gain per month. You need to set realistic expectations. And for that, you must educate yourself and develop the skills. Instead of trading the real market, start using the demo account for the first few months. Try to improve your edge by learning from the losing trades. Forget the fact, you are demo trading the market. Focus on the development of your system so that you can trade without taking any high risk.