Managing the risk profile in the Forex market is the most challenging task. People who have years of experience have learned the importance of money management in a hard way. Compared to the traders who have years of experience, the new traders in Hong Kong are quite lucky. They can easily access the online resources and use the smart method to manage the trades. The majority of the retail traders are losing money since they don’t have any knowledge about risk management. They are using random risk management techniques and losing money. Today we will give you some amazing tips which will allow you to scale the trade professionally. Follow the tips of this article to ensure the safety of your account balance.
Know your leverage
Many traders don’t have any idea about leverage. Leverage is the buying or selling power that you get from the brokers even though you don’t have enough capital. Let’s say, you have opened a trading account with $1000. The leverage of the account is 1:100. So, you do have the buying power which is equivalent to $100,000. It’s very hard for the new traders to control greed and fear when they have such insane buying power. We recommend the trader not use leverage more than 1:10. If you do, you must use advanced techniques to manage the risk profile. Failing to manage the leverage will result in big losses.
Determine your staked amount
You have to know the risk per trade. For that, you can use the demo account and find your comfort zone. Those who are looking for a premium demo trading account can try it now. Saxo is one of the best brokers in the world who provide a premium level solution to the retail trader. If you can professionally use their service, you can learn the art of trading without taking any real risk. Use their demo account to know more about the risk per trade. No matter how good the edge is, you can’t risk more than 3%. Anything about 3% can put your trading capital at great risk. Always follow the safety protocol as it will protect your capital from the big losses.
Learn about the news
You have to learn about the major news since it will allow you to scale the trade professionally. Those who are ignoring the news factors in the market are always losing money since they don’t know the impact of the major news. Analyze the price movement during the high impact news and you will notice many false spikes and extreme price movement. Unless you know the proper way to trade with the price action signal, taking the trades during the major news is a big mistake. Stay away from the major news and try to learn about the fundamental analysis. It will help you to protect the trading capital which will eventually boost up the performance.
Get ready to lose trade
You must be ready to lose trade regularly. Without losing money no one can trade in the market. Losing is more like an art and you must learn this technique by exploring the essential details of the market. As you gain experience with the market, you will slowly learn to take the trade like a professional trader. The professional trader always embraces managed loss. If you lose 3% from a trade there is nothing wrong. As long as you trade the market with proper risk to reward ratio, you should be able to earn a decent amount of money without having any problem. Stay focused and learn from the losses. But never become emotional just because you have lost more than 4 trades in a row. Accept the losses and stick to your trading system. Slowly you will learn to take the trades like a pro.
