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Four effective rules to protect your trading capital

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  • Four effective rules to protect your trading capital

    The rookie traders are always losing money since they don’t know the proper way to manage the risk factors in trading. Most of the time they increase the risk factors to a great extent to earn more money from this market. They consider high leverage trading account as a blessing to earn more money. But things are not as easy as it seems. You must understand the fact, leverage acts as a double edge sword. If you fail to manage the risk exposure, it won’t take much time to wipe your entire trading account. Let’s explore four effective rules which will protect your trading capital.

    Trade with a 1 % risk

    Never take a huge risk in each trade to earn more money from this market. Things might seem hard at the initial stage but if you start to trade the market with low-risk exposure, you can easily protect your trading capital. Losing or winning doesn’t matter as long as you trade the market with managed risk. Being a new investor, you need to consider the trading profession as your part-time income source. Never become frustrated if you face a few losing trades in a row. Take your time and try to trade the market with proper discipline so that you can make a profit at any market conditions. Blindly follow the 1% rule of money management for the first two years of your trading career.

    Learn fundamental analysis

    The new traders don’t understand the importance of fundamental analysis. They rely on technical data and loses a big portion of their investment. You need to trade the market with brokers like Juno Markets since you will know a lot about introducing broker program and news trading. Unless you keep yourself updated with the latest market news, it won’t take much time to blow up the trading account. Things are really easy when blending technical and fundamental data. Some of you might think learning to trade the market based on high impact news is a very challenging task. There is no reason to analyze the low impact data at the initial stage. Focus on the major news release and you will be able to find good trades with low risk.

    Use set and forget rule

    Majority of the rookie traders closes their profitable trades too early. By doing so they kill the risk-reward ratio in each trade. You have to understand the fact, trading is all about sticking to the basic rules of your strategy. You need to use the set and forget rule to protect your trading capital. But this system will only work when you trade the market with 1:3+ risk-reward ratio. Take advantage of a demo account and try to develop a valid trading strategy. Forget about the losing trades in the Forex market as it makes the traders frustrated. Be confident and stick to your rules. If required, start following a paper-based trading journal. Follow the footstep of the pro traders and you will become better at trading.

    Trade with the high-end broker

    You can’t protect your trading capital by trading the market with the low-end brokers. Majority of the rookie traders are losing money since they prefer to trade with the average class broker. On the contrary, smart investors prefer to trade the market with brokers like Juno Markets since they offer high-end trading tools. Most importantly your funds will be in the safe hands. You will have to deal with a complex market condition or lose a big portion of your investment due to a technical glitch. The high-end brokers always care about their trading clients. You won’t have to lose a big portion of your trading capital at the initial stage since they will not offer you extreme leverage trading account. Take your time and find a well-reputed broker who cares about your trading career.