As a novice trader, it’s really hard for you to understand the dynamic nature of Forex market. The majority of the retail traders are losing money due to their lack of trading knowledge and discipline. They simply open their trading account and start placing trades taking a huge risk. At the end of the day, everyone loses a big portion of their trading capital. Unlike the novice traders, the expert traders in the United Kingdom always trade this market with proper money management. You have to understand the fact that the outcome of each trade is random. You don’t know which trade will hit the potential stop loss and which one will hit your potential take profit level. You need to find a balance trading system which will help you to make money even with a 60% win rate.
Learn the associated risk in trading
Being a currency trader, it’s very obvious that you will dream big. But before in order to make a profit in real life you have to understand the associated risk in trading. The pro traders in the UK never takes more than 2-3 % in any single trade even though they have the best possible trade setup. You have to understand the random nature of this market. So, it’s highly imperative that you learn about proper money management to safeguard your trading capital. If you are not sure, take some professional trading course and you will get a clear idea about the trade management system. You can’t afford to trade this market with negative risk-reward ratio since it will ruin your trading career. Always aim for a 1:2 or better risk-reward ratio to overcome your losing trades without any stress. Lowering down your risk exposure is one of the key things to secure profit factor in trading.
Use the demo account for six month
Your future is now in your hand. You don’t have to risk real money to learn the art of trading. You can easily open a Forex trading demo account with the reputed broker like ETX Capital and start developing your trading system. The rookie traders often say that in demo trading there is no emotion which is true to a certain extent. But do you really want to risk money without learning the art of trading? To be honest, no rational people with chose to risk money in an unknown field. So, demo trading is one of the best options for you to learn the art of trading without risking any real money. Try different trading strategy in the demo account and see if the market allows you to make a profit. Learn from your trading mistake and fine-tune your system to make profit consistently.
Learn the price action signal
We all know that price action trading strategy is one of the best trading systems in today’s world. This system is based on the formations of different Japanese candlestick pattern. All the pro traders use the price action confirmation signal to place trades at the key support and resistance level. Some retail traders might say it’s really hard to learn price action trading within a short period of time but it’s not entirely true. The time period for your trading success totally depends on your effort.
If you trade with solid discipline and devote yourself to the trading industry, it won’t take much time to master the art of trading. Some traders often get carried away by seeing the reliability of a price action trading system. But no system in this world is perfect and as a trader, you will always have to face losing trades. So make sure that you are not taking too much risk while trading the market with price action confirmation signal. As a price action trader, you should always trade the higher time frame data since it will help you to avoid the false trading signal.
Byron Simpson is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance cent.