Friday, May 29

Four survival rules for the retail traders

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Four survival rules for the retail traders

Forex trading is famous for the leverage system. By investing a small amount of money, you can start making a pile of cash by taking advantage of leverage. Things related to trading are not that easy. In most cases, the trades become biased and fails to control greed. Before you start taking things seriously, you should consider the success rate. Only 3-4% of retail traders are able to make some consistent profit from this market. So, what about the majority of retail traders? They are either losing money or struggling.

To solve the issues of struggling traders, we have compiled some amazing tips. Follow the tips very carefully so that you don’t end up blowing up your trading account.

Know your trading tools

To find the trades the traders use special kinds of tools. These tools are available in the trading platform. So, chose a robust platform like SaxoTraderPro so that you know you have the best trading arsenal. But having those tools is not enough. You have to learn to use them properly to become the very best trader. First of all, learn about the horizontal line tools. It helps you to draw the support and resistance level with a high level of precision. After that, learn about the trend line tools. With this tool, you can place your trade in favor of the trend.

You might be bias in favor of one specific set of tools but this is not a professional approach. Learn the use of all of the available tools since you never know which will come handy in analyzing the market data.

Use technical and fundamental analysis

You have to use technical and fundamental analysis at the same time. To do so, use a great broker like Saxo Hong Kong so that you don’t have to bother about the technical glitch. After finding your desired broker, analyze the daily time frame to find your trade setups. The technical data will give you the perfect place for your trade. Without doing the fundamental analysis you should not be placid the trades. Combine these two approaches so that you can fine-tune your trading method.

Before you start using both forms of market analysis, use simulated software or a demo account to back-test your trading method. Once you have a verified trading strategy, start trading with real money.

Managing the trades

Managing the trades is a big challenge for naïve traders. In most cases, naïve traders break the rules of trading and start placing the trades against the trades. The lot size is insane as they have no idea about the risk management policy. Start with the standard 2% rule of money management. After you get accustomed to this method, you can increase the risk to up to 4% to boost the profit. However, if you lose a few trades, you should decrease the risk. Managing the trades might sound like a simple task but it is one of the most complicated tasks for retail traders.

Managing your emotions

Managing your emotions is the only way by which you can become a successful trader. Without having good control over your greed it will be really tough to make a profit. If you find it hard to control your greed, start meditating. Meditation can improve your skills to a great extent. It will calm your mind and allow you to think about the risk exposure before you execute a trade. But all these things need time. Unless you have the strong skill to deal with the emotional ups and downs, you should not try to become a fulltime trader.

Start slowly but try to learn things by heart. Never listen to your greedy inner voice as it is one of the key reasons for losing your entire trading capital.

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