No one can succeed in life without having a sound plan. You must follow a strategic approach in life to secure happiness. Similarly, the Forex trading profession requires a strong strategic plan. Many retail traders in Hong Kong have changed their lives just by using the basic concepts of trading. Due to their strategic plans, they have managed to make a consistent profit. So, how do you create a dynamic plan to make a profit from this market? Well, there is no exact answer. However, we are going to give you five amazing tips which can transform your trading career.
Start with the demo accounts
There is no point in trading the real market at the initial stage. You need to start trading the market with demo accounts. Make sure you chose brokers like Saxo since they always offer the best possible trade execution environment. If you can demo trade the market successfully, you can make a profit in the real market. Use the demo account to develop your skills so that you can make a profit at any market conditions. Being a novice trader, you will lose many trades in a demo environment but there is nothing to panic. Stick to the demo account and try to develop your skills.
Know your limits
When it comes to leverage trading, retail traders forget their limits. They risk too much and blow up the trading account in no time. But if you want to succeed in trading, make sure you are not trading with high risk. You might have access to a high leverage trading account, still, you need to trade with proper money management. But managing greed is very hard for the naïve traders. For this, the expert traders often suggest opening a Forex trading account with low leverage. But using the low leverage account, you will be forced to trade with low risk. Try to find your risk tolerance level and place the trade according to your risk management plan.
Risk reward ratio
Your trading plan must have a strong risk-reward ratio. If you trade with a poor risk-reward ratio, recovering the loss will be very hard. Those who have extensive experience in trading often say the risk-reward ratio is the key thing to make money in trading. Start trading the market with a 1:3+ risk-reward ratio and you will eventually get better. Forget the idea that trading is all about taking high risk. Follow the conservative trading method and try to learn from your mistakes. Never follow other people’s advice and take a huge risk in each trade. Trading is more like running a business with a strategic approach. So, act smart to save your investment.
Tune your trading strategy
The Forex market often changes its behaviors and it becomes hard for the naïve traders to make a profit from this market. But once you start to revise your trading strategy regularly, you can easily become a profitable trader. Your trading plan must include the term revision. Never get stuck with rigid rules. Rules in the trading profession require revision. If you fail to do this, you will never keep yourself in line with the dynamic nature of the Forex market. As a result you will lose money most of the time.
Focus on simple logics
No trading strategy in the world is perfect. So, never expect to create a perfect system to trade the market. You have to use simple plans. Does this mean advanced plans are not working in Forex? To be honest, no one is making huge profits by using a complicated trading strategy. You must keep things simple. Learn about the key support and residence level and try to execute the trade with proper stopples and take profit. Never become emotional while placing any trade since it will make things worse. Focus on long term goals and try to make huge profits from this business.