How do you safeguard your trading capital like a pro trader?
Everyone can join the trading industry without facing any trouble. Just by opening a trading account with a Forex broker, a person can gain access to the retail trading industry. Though the starting process of your trading journey is much easier, protecting the trading capital is going to be a tough task. Studies have shown, 95-97% of retail traders are losing money. So, protecting the trading capital is going to biggest challenge in your trading career.
There are many complex rules by which you can ensure the safety of your fund. But complex rules don’t help the investors to make the right decision at trading. If you want to survive as a trader, you need to follow the simples. So, let’s explore few common rules which you can follow to protect your trading capital.
Overtrading is one of the prime reason for which people keeps on losing money. The amateur trader thinks that by taking more trades, they can become a millionaire. Even after losing the trades, they become restless to recover the losses and follow an aggressive approach. All these steps lead to the problems of overtrading. If you really believe trading is the right profession, you should be taking the trades in a conservative way and trade this market with a valid routine. Once you start to do this, you will be able to focus on the quality trade signals. If you find it hard to avoid the problem of overtrading, start using mt4 copy trade service. See how the professional traders execute their trades. Soon, you will realize, overtrading is nothing but a big obstacle for the traders.
Avoid trading the news
News trading can be fatal for novice traders. Even professional traders don’t want to trade the news due to massive spikes in the price. If you intend to make a consistent profit, you must learn to find a simple way to execute the trades. And the trade execution should be done during the stable hours of the market. Sadly, the novice traders don’t have any knowledge about fundamental analysis and thus they keep on trading without considering the economic calendar. Eventually, they keep on losing money even after trading with the major trend. So, learn to analyze the economic calendar and avoid trading the major news event.
Stop using EAs
EAs often known as expert advisors have gained huge popularity among novice traders. The novice traders think that by using the EAs they can avoid the most common mistakes at trading and find reliable trade signals in the market. In fact, some of the new traders often pay heavy money to third-party websites to get their desired EAs. But if these robots were so successful, no one would work hard to sell these robots. They would have become the billionaire in this world. Since EAs are not completely reliable, they try to sell them to retail traders.
Try to learn the manual process of trading as it will help you to make better decisions. Moreover, it will protect your trading capital from unexpected market movement. However, if you intend to use a professional scalping method for bigger profit, you might rely on the advanced EAs.
Avoid trading with emotions
The rookies always consider themselves tough traders. But after trading the market for few months, they start to trade the market with emotions. They break the most basic rules for investment and trade with high risk. And thus they lose their capital within a short time. To survive in the trading industry, you must learn to control your emotions at any cost. It will be hard to manage the stress and enthusiasm, but you must train your mind to stay calm. If you become excited or addicted to this market, there is no chance of becoming a profitable trader. So, focus on your actions and try to execute new orders based on logic.