Protecting your trading capital in the Forex market is not so easy. The new traders in Hong Kong often think they can make a huge profit from this market without doing any hard work. They rely on their gut feelings and blow up the trading account in less than a month. Some of the retail traders often buy an expensive trading system from the pro traders and start to trade the market with heavy risk. Things might go well for a few weeks but eventually, they also lose money. No trading system in the world is perfect. You can’t make any progress by using other people trading strategy. You need to create a simple trading system based on your personality. There are many things you need to consider to protect your trading capital. But today we are going to highlight the top three reasonswhy retail traders are losing money.
Trading with high risk
No one understands the associated risk factors in the trading business. Even the professional traders often make mistake and pay for their actions. Unless you trade the market with managed risk, you are bound to blow up the trading account. You might have a perfect trading strategy still you should never risk more than 2% of your account balance. You might think this will dramatically reduce the profit factor but it’s not true. If you learn the use of price action confirmation signal, you can easily execute high-quality trades with big lot sizes without taking a huge risk. The more you learn about this market the better you will become at following a risk management policy.
Trading the market with the low-end broker
Your success greatly depends on the quality of your brokerage firm. Some of you might think the broker has nothing to do with your profit factor. But if you ever visit https://www.home.saxo/en-hk you will never trade the market with the low-end broker. The premium brokers are always working hard to offer the best possible trading environment for the retail traders. Moreover, they have professional currency analyst who gives valuable insight about the market. Just by reading their insights you can easily save yourself from many losing trades. Many, smart traders often use professional insight to find the very best trades in the market.
As a new trader, you have a lot to learn. Being an active trader with the low-end broker will make extremely complex since you never get premium educational contents on trading. But if you trade the market with a broker like Saxo you can easily access the educational reduces and learn many things about the trading profession. So, chose your broker very carefully if you truly want to become successful at trading.
Overtrading the market
Overtrading is a very common problem in the Forex market. If you assess the portfolio of the successful trader, you will be surprised to see their trade frequency. They hardly execute any trade throughout the day. Unless they are convinced in every aspect they never execute any trade. On the other hand, the novice traders lead a very busy life in finding the trades. They execute more than 10 trades in a day. This is not the way you should trade the market. Always remember, the quality will beat quality. You don’t need to trade too many trades to make a significant profit from this market. Try to find high-quality trades so that you can make a decent profit from one trade.
Losing or winning doesn’t matter as long as you trade with discipline. But this doesn’t mean you will lose 10 trades in a day and expect to make money since you follow the 1% rule of money management. No matter how good the trade setup is you should never have more than 2 running trades at one time. Trading is your business. So, create a solid plan to deal with the Forex market.