Forex Trading can be a risky business. It’s always a good idea for beginner traders to go easy as they get started. The most important thing is for you to always have a plan of action to protect yourself, but here are a few additional guidelines for you to use when dipping your toe into the trading world:
Protect your capital
The most important thing you can do to manage your forex risk is to never trade money when you can’t afford to lose it. People forget how important this is until this actually happens to them.
Don’t take big risk
Only allocate between 1 – 3 % of your money to open orders at a time, there is no need to make huge percentages every day. It’s better to keep it consistent. Consistency is key!
Use stop losses correctly
A stop loss is a type of order that stops you from losing any further money from your account. It’s important to remember that not all trades will go the way you expect. You will need a way to cut your losses. Set your stop in a spot that you know you will reach only if you are totally wrong.
If you are trading, controlling your risk with stops will prevent you from having a major loss. The steps mentioned above will not prevent you from losing money but will give you a chance to prevent it from happening. Trading while keeping your head in the game and keeping your risk low will put money in your pocket.
We can help you with risk management and give you tips on how to keep your head in the game.