Good luck loves those who improvise and are not afraid of experiments. The forex traders, who strictly follow the rules (recommendations to the forex trading strategies, analysts’ opinions), usually lose in the end. It is important to be flexible, quickly adapt to the constantly changing market. But still, the basic rules of forex trading exist, and ignoring them can result in huge losses. Do you want to learn more about such rules, and save your funds while making profits from the forex trading? Read on and you will find the answers to your questions!
The article covers the following subjects:
How to save your money and increase profits from Forex trading
According to statistics, about 90% of newbies lose their money, rather than earn in the Forex market, and they stop after the first failure. The remaining 10% do not give up, analyze errors, and go on, making a career as a professional trader. This means that you not only can but should make money on the Forex market!
The answer is easy. I need to be patient, constantly develop yourself. Do not be afraid to experiment and follow a few rules of a professional trader.
Elite forex traders
Whenever someone hears about foreign exchange trading, they give up trying to understand it because it feels complicated. However, if all elite Forex traders thought the same way, they would have never been what they are today - billionaires in their own right.
To peep into the world of high level Forex trading, we bring you some of the well kept secrets that professionals have been using to make themselves richer every day. However, one includes his/her name amongst elite forex traders with daily practice and viewing videos on the most successful trades. So, if you were planning on starting trading today, prepare yourself first.
Top 10 rules of a professional trader
There is no single formula for success, but there is a set of rules, the violation of which is likely to result in a loss. Remarkably, these rules are obvious and many know about them, but nonetheless many traders forget about them in practice. So, I think it makes sense to remind about these rules once again.
1. Observe risk management rules. This code of rule has existed for a long time, it is based on the errors that are made by 90% of beginner traders.
- The total risk should not exceed 15% of the deposit. This is a reminder to those who like using financial leverage, increasing the lots too much. When you multiply your trade volume by 1000 times, you increase the price of the point. If your deposit is stopped out because of the daily average volatility, this will be only your responsibility. Read more in this article.
- Trade the position volume that corresponds to your deposit. You can learn more about how to calculate the lot volume here.
It is up to you whether to follow these rules or not. But remember that only you are responsible for all risks!
2. Start trading on a cent account. The risk to lose money on a real account is associated with the responsibility and the fear of taking decisions. The thoughts about possible losses interfere with the focus. This fear will disappear with the experience, to overcome it, trade first on a cent account. The biggest loss here can be only the time, but this is the cost of experience.
3. Constantly optimize your trading system. The market is always changing, and any system will fail sooner or later. But you can spot the flaws before your system fails if you pay attention to the trading statistics. Before you launch a forex trading system run it through the forex strategy tester (MT4, Forex Simulator, FX Blue), optimize your strategy (optimization is one of the tester’s options), and study the backtest statistics. If you see that the performance is getting worse, stop trading. You can learn more about this here.
4. Always analyze the results. Even if they are positive. You should always know about strong sides of yourself and your trading system form the point of view of the risk evaluation, you should exactly know your trading account, financial instruments you use to make profits from forex. If you lose, it should be seen as a lesson. Try to record all your actions and results. You can do it in several ways. You can attach your account to the MyFxBook monitoring portal, where you can obtain and group all the data on your trading account performance.
5.Diversify your risks. This way, you can not be afraid of any force majeure. And the matter is not only in investing in different instruments or using different trading strategies. It also suggests ways to receive extra income. For example, social trading or affiliate programs. You can learn more about risk diversification and balancing your investment portfolio in this overview.
6. Do not ignore stop losses. And the matter is not only because traders are lazy to set stop losses or that they are always triggered by the price. Setting stop losses is a whole strategy that you should master to avoid the schemes of market makers and hold trade in the volatile market and save the deposit.
7. Be careful during the news releases. At these moments the Forex market is very volatile, you can both gain and lose here. Avoid trading during an hour before and after the news release that is highly important according to the economic calendar.
8.Never lose control over emotions, and you will not lose control over the situation. The psychology of trading is 30% of success. It seems easy in theory. In practice, the desire to gain more in Forex, or compensate for the loss involves huge psychological tension. Irritation, frustration, stress, euphoria – all of this makes it hard to focus. You can learn more about the psychological aspects of trading here.
9. Do not pursue profit, your goal is stability. The more is the profit, higher is the risk. The pursuit of profit leads a person into a psychological trap. At some point in the desire to earn even more, the trader, without noticing it, violates the rules of risk management, increasing the risk of loss. Do you want to earn more? Then, you can become a successful PAMM manager or a professional in social trading.
10. Be confident in your abilities and just enjoy trading! If you like your job, good luck will choose you!
And, finally, there is another useful thing. Everything you need to know about Forex risks, technical and fundamental types of risks and the ways to optimize them is covered here.
What would you add to this list? Share your opinion about what is the most important factor of success in Forex in the comments. How not lose your deposit and become a professional trader? I will be glad to read your comments!
P.S. Did you like my article? Share it in social networks: it will be the best "thank you" :)
Useful links:
- I recommend trying to trade with a reliable broker here. The system allows you to trade by yourself or copy successful traders from all across the globe.
- Use my promo code BLOG to get a 50% deposit bonus on the LiteFinance platform. Simply enter this code in the appropriate field when funding your trading account.
- Telegram chat for traders: https://t.me/litefinancebrokerchat. We are sharing the signals and trading experience.
- Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders https://t.me/litefinance
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.
According to copyright law, this article is considered intellectual property, which includes a prohibition on copying and distributing it without consent.
