The Forex trading success depends first of all on trader’s skills to cope with one’s profits, with trading capital in general. The clue principle that a trader should certainly possess is clear vision of trading system. Among the components of the whole picture of trading system or trading platform one must determine the following:
- the deposit sum that could be used per one deal
- the risk rates per trade
- the gains/losses balance
- the emotions control
Don’t chase on rapid earnings! Here are some tips for the rational trading process.
- Trade only on your own money, don’t even get yourself the hopes up that you will get the loan or borrow only once, from a very start, not more. Use only your own funds.
- Invest in different brokers or finance instrument. There are more chances to save or increase your income trading on different platforms with diverse brokers.
- Be patient. Don’t try to increase the profit deals aggressively and fast, for example more than 10 times per one deal.
- Prevent the great losses. The acceptable safety threshold of losses is minimum 2% and maximum 5%. It’s the important value for stop losses accounting (equity stop, volatility stop, chart stop, margin stop)
- Comply always with the ratio of profit and loss. Keep in mind when assessing this indice the profit should be three times larger than the loss (3:1).
- Be sure and calm at trading process. You have open the position, set the stop loss and take profit. The trading process reached the favorable line for you, you’d got the awaited profit, close the deal. When the price reached the level of stop loss, be sure to exit.
- Keep your emotions in check. There are a lot of loss risks, that are waiting for you to lose your nerve and run out of money.
- Don’t trade at time when you should sleep. You can’t make a sober estimate of one’s performance, efficiency at time, when your brain usually sleeps.
- Take the profits partially, even by small portions, don’t run your risks. The great profit can be assumed by small profits. And also be aware of trading process, do pros and cons at every deal. If the chances of profit are lower against to the profit to gain, stop trading.
- Try the demo version of a trading account before the starting the «real» trading rally.
As one can see, the Forex money management is a many-faceted phenomenon so is the process of trading strategies usage. You may possess the best trading strategy, the excellent plan, the increased focus on deals and anyway fail if you ignore the system of money management. The dozen of traders daily loose their money, open new deposits, fail and continue to ignore the clue techniques of money management. If you don’t want to be a part of the faceless mass and dream to be a successful trader, it's time for practising the right approach. Cheers and safe trading!