Learning to protect your account balance in the trading business
Everyone knows trading is a business, but deep inside the heart, people consider it as the best way to make money online. This concept ruins the life of a trader. Thousands of traders in Hong Kong are struggling with this trading business since they don’t know how to manage the trades in an effective manner. They forget about the safety rules and place big trades. As a result, they end up blowing up their trading account. In order to ensure the safety of your trading capital, you must learn to take the trades with low risk. This is not all complex provided that you follow the tips of this article.
Risk only 1% of the account balance
Being a novice trader you are not required to learn the advanced stuff of money management. Start taking 1% risk and you will be able to make a profit most of the time. Taking more than 1% risk in each trade requires advanced knowledge of money management. Those who have less than six-month experience can’t deal with the advance risk management policy and they will definitely blow up the trading account. If you take a look at the professional trader, you will learn that they are often taking a 2% risk. It’s absolutely fine but for you, it is safe to start with the 1% risk exposure. After you feel comfortable with your trading approach, you can increase the risk and make some decent cash from this market.
Are using a safe account
The protection of your trading fund is also the responsibility of your broker. A bad broker can cause technical problems and cause you to lose much more money than you willing to lose. Even after using a protective stop, you might experience insane slippage in a stable market condition. This problem can be solved by choosing a high-end broker like Saxo. To learn the details about the professional trading environment click here. A good broker will be regulated by multiple authorities and they will care about their client. Most importantly, they will never steal your money which is very common with scam brokers.
Use a robust trading method
You must use a robust trading method to ensure the safety of your trading capital. If you use a complicated trading structure and try to earn a huge amount of money with that model, you are going to lose most of the time. The robust trading model doesn’t mean you will be using the super complex model. You have to use a strategic approach and take the trades with managed risk. Once you become good at analyzing the market dynamics, you will be able to make some serious profit. Think about the professional trader’s approach. They use a simple supply and demand line to execute the trade. Follow their path and you will be able to make some serious profit.
Trade with a low leverage account
Choosing the leverage determines how much money you will make or lose at trading. Most of the time, the rookies use the maximum leverage possible since they want to have insane buying or selling power. But the use of high leverage trading account usually results in a big loss. The traders don’t have the ability to manage the risk exposure properly when they are using insane leverage. After losing a few trades, they become confused and start blaming the market. But if you look at the top traders in the world, you will notice that all of them are using a low leverage account
The steps that you will take determine the safety of your capital. Follow the tips of this article very carefully if you want to protect your investment. Never become a greedy trader or trade this market with emotions as it can ruin your capital in just a few months.