Develop a proper trading edge for your business
by Perna Satpo
If there is a proper trade setup ready, you can ensure profits from the beginning. Forex makes the traders act differently than an organized businessman. Due to the information on daily transaction in Forex, many traders benchmark trading success with profits. It is bad for trading with currency pairs. As the industry (Forex) has the most volatility compared to any others, you can lose more trading orders. With some traders, the amount of money lost in trades is high due to a poor money management plan. Some traders even try to follow over-trading or micromanagement to increase their chances of making profits. None of the above is good for quality trading performance. With big risks per trades, over-trading and micromanagement, you will only lose more trades and money.
So, it is necessary to trade with proper plans. And to ensure an organized trading performance, you will also need to trade with a solid trading edge. If you have the plans, strategies, and skills ready for the position sizing and risk management, it will bring good luck to you.
Trade less frequently with proper signals
It is necessary to trade less frequently to ensure quality performance. If you cannot think and analyze the market conditions properly, a proper position sizing is not possible. Instead of quality trading performance, you would go towards over-trading which is a curse in Forex trading business. To ensure proper performance, you will need to develop a proper trading method by using the Forex practice account free. The long term trading policies like swing and position trading would be good. For a rookie, it is easy to deal with short term trading like scalping and day trading. Whatever you choose for your business, try to follow a decent frequency of trading. If the market condition is not suitable, you do not have to trade every single day. Instead of looking for a position sizing try to learn more skills for technical and fundamental analysis.
With the plan of low-frequency trading, you can ensure the safety of the business. At the same time, it is also possible to improve your trading edge. The business will be very efficient with this policy and will bring more profit potential from the trades.
Stay safe from the micromanagement problem
For the rookie traders, it is hard to work around the trading losses. Even with the best possible trading plans, you cannot save the trades. That does not mean, you have to trade with micromanagement. It is a vague idea of trading with micromanagement. You may have more information on the market condition but your trading mind will be confused. With multiple tools and trading skills, you will lag quality effort.
For example, if you use micromanagement for trading, it will affect the stop-loss and take-profit placement. You may have the most proper analysis with the support and resistance zones. It will not help when your mind is too busy with the information. Thus, you cannot utilize the potential stop-loss and take-profit placement. It is also possible, you will increase the stop-loss according to the price movement. This happens mainly when a trader is losing a trade and there is a possibility of the market to turn over. It is not a good idea to change your trade setup according to the price movement. It will make you lose even more money than you intended to.
Follow proper rules for the executions
Before approaching a trade, there are a few things needed for the trades. You will need to plan for proper money management. It will define the investment policy for trading. With a decent lot size (2% of the capital) and leverage (1:20), you have to invest in a trade. After that, decide on a decent risk to reward ratio like 1:2. When you are done with the trade setup, try to find a proper position sizing to satisfy the profit target. Trade with a solid plan like it and you will be safe with your capital.