Four Proven Ways to Safeguard Your Trading Capital
By Space Coast Daily // February 24, 2020
Start to trade the real market is not a tough task. You can open a demo account with the low-end brokers just with $1. Some of the brokers are offering no deposit bonus so that the traders can start trading without investing any money.
By now it should be clear that getting access to the online trading industry is not so tough.
But making a profit by using your intellect is a tough task. It becomes really hard for investors to protect their capital in the long run. Even after trying all the basic rules, the rookies manage to blow up the trading account.
Today, we are going to discuss 4 proven ways that can significantly reduce the risk of trading. It can protect your trading capital.
Use of leverage trading account
The first thing that you should consider is the leverage of your trading account. The unregulated and the low-class brokers are always offering high leverage so that the traders can open big volume trades. Though it increases the profit factors to a great extent, it has also become one of the key reasons for blowing the account.
No matter how much money you can afford to lose in any trade, you should never be trading with more than 1:10 leverage. Some skilled traders often consider 1:10 as very high leverage.
By lowing the leverage, you are lowing the risk exposure and potential profit factors. Most importantly you won’t have insane buying or selling power which is most likely to save your capital.
Standard safety protocols
As an investor, you should always follow the standard safety protocol. For instance, you should choose the best Forex account Australia so that you don’t have to worry about the trading environment. Try to execute the trades based on a simple strategic approach so that you can earn decent money without losing too much.
Analyze the quality of your broker since you don’t know whether you are trading with the unregulated brokers. People chose Rakuten as their prime broker since they are highly trusted and regulated. Once you start playing with a safe broker, there are many things you will slowly learn about this market. Most important, skilled experts will guide to overcome the challenges.
Trade with the trend
The losing trades are nothing but an immature act of the retail traders. But this doesn’t all the traders will lose money. There are few traders, you know the importance of trend trading method.
They are not willing to bet against the trend since it cost them a fortune. If you want to keep your fund safe in the Forex market, make sure you learn the trade with the major trends.
Things might be hard at the initial stage but once you learn to trade this market by using the key swings, it won’t take much time to learn the trend trading approach.
Stop risking than 1%
You need to stop risking more than 1% of your account balance. Though it can help you to earn more money, you can also have a big losing trades.
Instead of thinking about the big profit factors, think about the safety of your trading capital. The traders should never get biased by seeing the millionaire in the Forex market. The millionaire has learned the art of trading by using the lower possible risk exposure factor.
However, you can trade with a 2% risk after getting yourself familiar with the basic concept of trading. Think twice before you place any trade with high risk. It’s better not trade rather than losing money on the low-quality trade setups.
Protecting the trading capital is not all hard. Try to stick to the core rules of this article, and you won’t have to blow up the account. And keep on learning new things about this market so that you can take a quick decision at any market condition.
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