June 30, 2017 at 2:48 pm #238
Forex market is like a game. It is a very popular game around the world. Where all ages of traders are coming with their pocket full of money to invest in this game. In this market, the majority of the traders quit trading after trading the market for first few months. They blow their accounts and they do not have a single penny in their account to place the next trade. In this article, we are going to focus on a very important subject which is excessive risks in forex, which may contribute to your account blown up. Risks in Forex is mandatory but when you begin to take risks out of nowhere, that is when the trading becomes risks and your money begins to evaporate from your account. If you look at the professional Singaporean traders then you will notice that all of them are taking managed risk in the market. They know very precisely that in order to survive the market, in the long run, they need to take a strategic risk and execute the best possible trades.
Result of excessive risks in Forex
You may all have heard the saying, “Too much of anything is bad”. Even if it is essential vitamins which you need for your body, having it in an excessive amount will damage your health. In trading, every trader has to take risks as a part of this trading market. Investments are subject to market risks and traders know their loss can exceed investment. But to make a 10-dollar profit, you have to take a risk. The problem happens when traders begin to risks 450 dollars for 100 dollars profit and lost the trades. Not only that, many of them cannot accept that they have lost this trade. They hang onto these trades, hope that the market will come to their favor, and incur a mammoth loss in their account.
If you are taking risks in exchange traded funds industry then take the minimum risks. Also, you can have a lesson about the risk to reward ratio. It is a trading guideline where traders, especially new traders are given tips how much risks they should take for each trade. If there is a chance of profit, for say 100 dollars, should they risk 80 dollars or 40 dollars for the profit? The risk to reward ratio answers this in the market system of forex which helps the traders to plan their strategy with minimum risks of losing money.
Price action trading strategy
Most of the novice traders lose money in forex due to their lack of trading discipline. They even don’t have the perfect trading system to make a consistent profit. So if you truly want to become a profitable trader then make sure that you are trading the live assets after knowing the market details. Price action trading strategy is very much popular nowadays and the expert traders consider it as one of the best trading systems. The traders use the reliable candlestick pattern at the key support and resistance level to execute the best possible trades in the market.
Control over emotion
Emotion is one of the most dangerous enemies for the forex traders. As a full-time trader, you should never place any trade based on your emotions rather you should use your rational logic to find the perfect trades in the market. Always try to focus on quality trade execution and do the perfect market analysis. And always remember not to risk more than 2 percent of your account capital in single trade.
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