The rookie traders have a big dream to become a multimillionaire within a short time. They keep on taking their trades with the big lot as they think it is the most efficient way of making money. But this is not the proper way by which you can improve your lifestyle. To become good at trading, you have to know how much money you can earn as a trader. If you invest a small amount of money, you should not be expecting a big profit from the retail trading industry. Similarly, when you invest a big sum of money, you have to be very cautious to avoid big losses at trading.
Today, we are going to give you some amazing guidelines which will help you to avoid many frequent mistakes. Thus you will be able to avoid big losses in the retail trading profession. So, let’s get into the details.
Finding the trend
You need to be cautious while analyzing the market trend. Most of the trading strategies do not give enough importance to the existing trend. Usually, the trading system is based on the support and resistance level and the traders often take their trades against the prevailing trend. So, to protect your trading capital, you have to find a simple way to draw the trend line in the market. Once you become good at drawing the key trend lines in the market, you should be able to take the trades with the trend. Thus you will be losing fewer trades in the trading industry.
Analyzing the critical hours
Being a rookie trader, you should be extremely cautious about the high-impact news. If you fail to manage your trades during the intense volatility of the market, you might face heavy slippage. Thus you will be losing a significant amount of money in the trading profession. So, to protect your trading capital, you must learn to analyze the news factors in different trading sessions. If not, you should avoid taking the trades right after the major news release. Those who don’t have any idea about the impact of the high-impact news, navigate here. Use the free articles at Saxo and try to understand why news analysis is so important for your trading profession.
Lower down the leverage
No one should trade the CFD market with the high leverage account. The high leverage account might provide you professional trading environment but it will definitely increase the risk factors. So, to take the funds safe, you should be using a trading account that has very low leverage. Most of the high-end brokers never offer high leverage trading account to their clients. They know it is one of the prime cause for which the novice traders keeps on losing money. You may think you know every bit of detail about the market and the use of a high leverage trading account is not going to affect you. But if you think in this way, it is better to learn the basics of trading from the scratch.
Stop using the complex system
There is no reason to believe that the complex trading system is going to make you a rich trader. You have to rely on a simple trading strategy as it will help you to find reliable trade signals in the market. People who rely on complex trading method has very high expectations from the market. In their subconscious mind, they think to become the richest trader in the world. But having such thoughts is very lethal for your trading career. You need to be a humble trader who has the enthusiasm to learn new things on regular basis. As you gain more knowledge about this market, you will realize the cons of using a complex trading system. Thus you will start working hard to develop a simple trading system.