In other businesses, more sales bring more profit. But in the trading business, the concept of making a profit is different. You need to favor quality over the quantity to ensure a decent profit. Instead of trading too frequently, you need to ensure proper position sizing. The number of trades may be little but they need proper care from you. Using a decent trade setup, you have to ensure proper performance. To improvise with time, you will need to learn and improve your trading skills. The market analysis and risk management require dedicated time. Try to learn different strategies and find the right one for your trading style. If you keep losing trades, stop immediately and get into demo trading. There, utilize the best trading strategy to execute the best trades. At the same time, try controlling the position sizing with proper stop-loss and take-profit.
If you can stop trading intensively and start being patient with the executions, you can thrive. It can also help you make out an impressive trading career in Forex. To get some idea on relaxed trading, read this article properly. It contains a few most important aspects of the secured trading process.
It is not secure to trade with big lots
It is not safe to trade with too much investment. You will only increase the chances of losing more from a big lot. To the rookies, it may be logical to use big lots to manage a decent profit from a small price movement. It may work in the stock trading business. In currency trading business, you will lose more because the volatility is too much compared to the stock market. So, it is not safe to trade with big lots. Instead of working with the standard trades, drop the investment down to micro or a nano lot. If possible, leverage the investment with a decent ratio. To avoid the losses from a losing order, you will need proper leverage like 1:20. It will increase the investment and handle your equity after a losing trades. For this very reason brokers like Saxo never offers insane leverage to retail traders in Hong Kong.
With every trades, you need to follow a decent risk management policy. Experts suggest trading with a 0.1% risk management policy. If you can ensure that with the lots and leverage, your trading performance will increase by a considerable margin.
You will need proper stop-losses
From the risk management policy, the traders can sort out the position sizing. It helps the traders to trade consistently. On the other hand, the traders also stay humble with simple risk management. From an influence, they also set a small target like 2R for the trades. If you can trade with a proper position sizing with 1:2 risk to reward ratio, it will be a good position sizing. After setting a skeptical position sizing for the trades, wait for a suitable market condition. Use proper fundamental and technical analysis to find the best position for entry.
With the strategies, you can trade properly. To deal with the losses, you will need to use another thing. It is two things which are stop-loss and take-profit. If you want to be safe from an uncertain price movement, it is necessary to trade with stop-loss and take-profit. It may not reduce the number of losing trades but you can handle the loss of your capital.
Trade with a consistent trade setup
To ensure a better performance in Forex trading, you will also need disciplines with the trades. It may not be acceptable for many novice traders but there is no alternative way. Unless you are strict with a trade setup, you can’t ensure quality. Your trading mind will keep running back and forth with the trading edge. Sometimes, your subconscious may force you to use a different strategy than what is needed. Instead of trading dynamically, follow a strict trading plan even if it is not efficient. Try improving it with time and you will be safe.