The rookie Forex traders start trading the live asset with a big dream. They think this is the perfect place to make big profits. As soon as they start trading the real market, they understand the complex nature of the trading industry. To become a successful Forex trader, you have to learn the details of this market from scratch. Taking the unnecessary risk to earn more money is not going to help. Follow the tips of this article and you will see the change in your performance.
Trade with low-risk exposure
You need to find your risk tolerance level. Every trader is different and based on their personality they should define the risk factors in trading. Those who are trading the market with high risk are always losing money since they don’t know the perfect way to manage the cash flow. Being a novice trader, your first job is the asses your risk tolerance level. Once you have completed the assessment, you should think about the long term goals and minimize the risk exposure in every possible way. No matter which trading system you follow, your risk exposure should not exceed more than 2%.
Growing your account
The rookie traders always start trading with a small investment. Instead of investing more money, you should focus on the organic growth of your trading account. Never withdraw all the profit rather reinvest it to increase the size of your trading account. The bigger the size of your trading account, the better chance you will get to make a profit. But never forget the fact, taking too much risk to increase the size of your account will jeopardize your career.
Find the weakness
You need to revise your trading strategy regularly to find the weakness in the system. Use the Forex trading demo app to backtest your trading strategy. Being a novice trader you will not underhand many things at the initial stage but once you start to focus on the trading environment, you will slowly begin to understand the perfect way to place high-quality trades. Finding the faults in your trading system is not the end of this story. You need to work hard and fix those issues with some valid logic. The retail traders often get confused when they fail to find the mistakes in their trading strategy. In such a case they should seek help from the trained traders.
Stop trading multiple assets
You should not trade multiple assets at the initial stage. If you trade one pair, you will learn many things about that specific asset. For instance, if you start trading the EURUSD pairs only, within a short time, you will know the INS and OUT of this pair. On the contrary, if you start analyzing too many assets, you will never get precise information. You must trade this market in a very organized way or else it will be really hard to make a profit. Those who are relatively new in the trading business are always losing money since they are dealing with multiple assets. Unless you have more than 1 year of trading experience, you should not trade multiple assets.
Stop adding to the losing position
Adding to the losing position is a very big mistake. But the naive traders are always making this mistake and losing a big sum of money by trading the same pair. You need to accept the fact, losing trades will be a part of your trading profession. If you stop adding to the losing position, you can significantly improve your trading skills. Stop thinking in a complicated way and consider trading as your business. Follow a strategic approach to make some big changes in your life. Never forget the fact, the majority of the retail traders are losing money. So, act smart if you intend to become a profitable trader.