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Becoming a successful trader by lowering down the risk factor

Novice traders don’t realize the importance of risk management factors in the early stage of their trading careers. They keep on trading the market with high risk and expect to make a big profit. But aggressive actions in the investment industry usually make the traders frustrated. If you want to make a living based on the Forex trading business, you must learn to take the trades with low risk. And if you do so, becoming a successful trader is going to be a lot more easily.

Lowering down the risk exposure in the trading profession needs to be done in a very strategic way. It’s not like you have to trade with low risk in each trade. Read this article as we are going to discuss some of the key steps which you can follow to lower down the risk factor in each trade.

Low leverage trading account

You should not trade the market with the high leverage trading account. To protect your trading capital, you must learn to lower down the leverage in your trading account. The maximum leverage which you should take per trade should not exceed the ratio of 1:10. You can easily find such a leverage trading account by choosing a good Forex broker. Once you learn to select a premium broker, you will no longer face trouble in selecting an optimized leverage trading account.

Try to ride the trend

When you take the trades with the top Forex broker UK, you should remember the importance of trend trading strategy. Without taking the trades with the major trend, you will never learn to take the trades with a great level of confidence. Learn to draw the major trend lines in the higher time frame and take your trades in a very strategic way. Once you become good at analyzing the key trends in the market, you will become much more efficient with your actions. Most importantly, you will learn to execute high-quality trades with an extreme level of precision. 

Analyze the news event

To keep your funds safe, you must learn to analyze the major news. Taking the trades based on the technical data only increases the risk factors to a great extent. The elite traders always merge technical and fundamental data to find the best possible trade signals in the market. Once you become good at analyzing the major news event, you should be able to make large profits with a great level of comfort. Through analyzing the key news event is a bit tough task but you can do so by following some safety protocols. For instance, you can learn about the high impact news by reading books and articles. Once you become good at analyzing high-impact news, you won’t have to face much trouble in the trading profession.

Use the Fibonacci retracement tools

The rookie traders often take the trades with high risk and they say they have nothing to do. But if they learn the use of Fibonacci retracement tools, they easily ride the trend by using a tight stop loss. Some traders often integrate the price action trading technique to improve their trade execution process. Though this is a very powerful way to find reliable trade signals in the market, you still need to be cautious about your trade execution process. If you fail to manage your risk profile in a strategic way, you will keep on losing money. 

Trade with less risk exposure

Being a new trader, you should risk 1-3% of your account balance. If you invest a big sum of money, it would be wise to risk less than 1% of your account balance. Once you start maintaining the basic rules for money management, you won’t have to worry about the risk factors. You can easily find reliable trade signals and execute quality trades. But remember, no trade is perfect. Be prepared to deal with the losing trades on regular basis.