Are you aware of the open secret in trading, that roughly 90% of traders lose their money? Many beginners fail to gain from their investment not because they are not familiar enough with trading. This is because they are not knowledgeable in terms of properly managing risks.
If you just got into trading and wish to improve your skills, here are some tips for you:
Equip yourself with the basic trading knowledge.
By that, we recommend that you take a training course so you could get deep knowledge regarding this kind of trading. It is not enough that you just know how to sell or buy a pair of currency. There are a lot of technical details you should be aware of in trading, such as correlations, spreads, and volume sizing.
Be aware of proper risk management.
Professional traders are the ones who know how to manage their capital very well. If you did not have one, there is a big chance that you will just blow your account.
Come up with a set of rules for your own trading strategy and stick to them.
You have to concentrate on the risks and the losses, and not on winning when planning your strategies.
Keep a journal.
You might regret not having your own trading journal, especially if you ended up losing a lot of trades in the end. In the event that you asked yourself why you lose, at least you have a journal that showed your mistakes in the past.
Prefer the higher time frames.
Anyone who wants to be successful in trading should trade on higher time frames of the daily chart. A common mistake among newbies is trading on lower timeframe, believing that it will give them more chances to win. The truth is that it is quite risky to do the latter.
Be cautious in following other traders.
If you are really eager to take after their steps, then you also have to know their strategies. Following others blindly will be too risky for you. You have to be aware that other traders might be applying the same approach but they are still trading at a time different from your time frame.
Manage your expectations.
In trading, you will not get million dollar worth of profit just because you have invested lots of money in it. If you are already getting 5% gain in a month, be content with it because it is an indication that you have a good strategy.
Select the right broker.
Be careful when picking the right broker for you. The bad ones are usually the ones who were not regulated. The regulated ones will not allow new traders to hold positions against their own trades. Don’t waste a lot of money on brokers with higher spreads or swap rates than others.
Gain more by trading less.
In trading, you don’t necessarily have to trade as often as you can so you could get a profit. Don’t make the mistake of wiping out your entire trading account by planning a big win through higher leverages.
Apply the stop losses before an entry or an exit plan.
Every new trader should know the importance of using the stop loss order. You will not save your money with a close stop loss. It will only negatively affect your balance.