The world is moving fast and people are fighting very hard to secure their financial stability. They start working early in the morning and remain busy until the end of the day. But do you think that they are provided with a handsome amount of salary for their labor? Most of us are underpaid due to socio economic crisis. The economic performance of the country has a huge impact on the average hourly income of its citizen. So for this very reason, people are always looking to find an alternative source of income to support their family. After doing vigorous research most of us find that trading is the best possible solution to make our life better since there is no potential cap to our earning. To be honest the sky is the limit for the successful trader. But making money out of Forex trading is not at simple. In fact, 95% of the traders are losing money. You can definitely earn huge amount of money by Forex trading but to do so you must know the perfect way to save your trading investment.
Nowadays Forex trading is getting huge popularity in Asian countries like Singapore. However, most of the retail traders in Singapore have a tough time during their initial stage. They simply start trading with learning all the details of this market and ultimately lose their entire investment. Some novice traders often think that this market is all about randomness and there is nothing to do with technical analysis. But if you really want to ensure your financial freedom based on trading profession then you must educate yourself. After you finish reading this article you will understand that saving your investment is more important than making a profit. We will give you some amazing tips to survive in the extremely volatile market condition.
Never risk any amount which you can’t afford to lose.
Trading is such a profession where you can’t ignore the losing trades. You might have in-depth knowledge about this market, still, you will often have some losing trades. Most retail traders blindly follow the 2% rule of the Forex market. But you need to know that even after taking 2 % risk of the account capital in every single trade, you can blow your entire trading account. You need to ask yourself how much you can lose on a certain trade. The amount that you need to risk in order to place a trade should be determined based on psychology. Never consider the traditional rule of money management rather assess your risk tolerance level based on your personality and financial condition.
Develop a balanced trading system
The Forex market is dynamic in nature. Without having in-depth knowledge of this industry it’s nearly impossible for you to make a profit. In fact, most of the retail investors are losing money due to their lack of trading knowledge. We know that 5 % of the traders are successful and living their life to the full. So how do they do so? The answer lies within yourself. Have you spent enough time on educating yourself with the proper knowledge of financial instrument trading? The simple answer is NO. To place quality trades in your online trading account you need to develop a balanced trading system. Some of you might say that they have bought trading strategy from the successful trader but still failing to make a consistent profit. So what’s the reason behind this? A trading strategy is different for every single individual in this world. You need to develop a balanced trading system based on your own personality. Based on the knowledge you should craft your trading ideas into the system.
Get rid of your emotion
Getting emotional after facing few losses is very common for all novice traders. Remember that Forex trading is not suitable for all. Only the passionate people who have complete control over their emotion can nail this market. You need understand that there is no business in this world where you will make 100 percent profit all time. There will be ups and downs in your business. When you are trading the live assets make sure that you are using proper money management and aiming for high-risk reward trades. You might have all the essential trading knowledge and even after following every rule of system you might face consecutive losses. But this shouldn’t affect your emotions. You need to accept all the losing trades smilingly and wait for the next possible trading opportunity. If you simply trade with 1:2 risk reward ratio then you can make money even with a 50% winning rate.
Fundamental factors in Forex market
Most of the new retail traders often ignore the high impact news releases. They simply think their technical analysis skill is capable to deal with the dynamics of this market. But in real life trading, you must know the political and financial condition of a certain country currency which you are trading. For instance, if you trade GBPUSD pair then you need to know about the economic performance of U.S and Great Britain. Fundamental analysis will give you clear insight into the overall strength of the trend for a certain currency pair. Even the long term prevailing trend of a certain country might get changed due to high impact news release.
If you truly believe that trading is the perfect profession for you then you need to invest your time and money on proper education. This market is traded based on three major types of analysis. You should develop this three sets of skills and develop your own trading system based on your personality. Make sure that your trading system is well polished so that few losing trades doesn’t cost you a huge amount of money. As a currency trader, you need to learn to minimize your loss in every possible way. Always trade in favor of the market trend and never risk any money which you can’t afford to lose. Focus on your investment, not on your potential gain.