Top four tips to safeguard your trading account
Trading the Forex market is a very profitable business. Those who have mastered the true art of trading is making millions of dollar profit. Sadly, you won’t find many successful traders in the retail trading market. Most of the investors are losing money regularly as they don’t have any knowledge about trading. Those who have a fair knowledge about the retail trading business, keep on breaking the rules. To them, trading is one of the quickest methods to earn money in the retail trading market.
Surviving in the CFD trading industry and securing regular profit is a very tough task. Unless you rely on simple logic and take the trades in a standard way, you will never learn to keep your funds safe. So, let’s learn some amazing techniques by which we can protect our capital.
Stick to the major trend
The news traders are often biased to trade the tops and bottoms of currency pairs. They want to ride the newly formed trend to make insane profit from a single trade. But taking the trades on the major reversal is by far the most difficult process of trading. Even professional traders find it hard to trade against the trend. So, stop trying to bet against the market trend. Find the existing trend and wait for the end of the retracement. Once you find the reliable trade signals at the support or resistance level, take your trades.
Some of you might get biased after mastering the trend trading strategy. But remember, the trend in a market might get changed without any prior notice. So do not trade the market with high risk or become aggressive with your trading actions.
Select the best broker
To keep your fund safe, you need to select the best CFD broker. Explore the key features of Saxo and learn about the professional trading tools. If you take the trades with the top brokers, you won’t have to face any technical issues. Moreover, the broker will keep your funds safe. On the contrary, if you chose to trade with the bad brokers, they might freeze your trading account at any prior notice. And there is nothing you can do to get your money back.
A good broker can help you in many ways. They publish regular educational content and you can use them to develop your skills. Once you become good at the analysis process, you should be able to earn more money by using the best possible tools.
Advance risk management technique
In every trade, you should risk only 1% of your account balance. Those who risk more than 1%, have to deal with heavy mental stress. Some of you might have extensive knowledge about this CFD trading business. So, they can take a 2% risk in every trade. But the overall risk factor must not exceed your risk threshold level. Since risk threshold levels vary, the rookies often end up taking more than 10% risk. But this is very lethal for trading.
As a smart trader, you should not open more than 2 trades in a row. And the sum of the risk for those two trades should not exceed 2% of your account balance. So, you should be taking a 1% risk in each trade.
Avoid trading the key news
Thousands of traders have blown their trading account by trading to trade the major news. News trading is not that effective and it will never help the retail traders to find the best possible trade signals. In fact, professional traders use the news data to analyze the strength of the trend. Based on the news data, they determine the risk to reward ratio for each trade.
So, avoid trading the high-impact news at any cost. However, if you still intend to make money during the news, develop a news trading strategy. And make sure you demo trade the market during the news before using the new strategy in the market.