June 12, 2017 at 9:08 am #1114
Forex trading is very much popular nowadays. Most of the novice traders consider trading as the best source of income in today’s world. To be honest, indeed its best source of income but in order to make profit consistently, you must have a solid trading strategy and clear understanding about the financial market. In the past, only large banks and institutions were allowed to trade the live assets but due to the advancement of technology, retail traders have the perfect access to trade the market.
The professional traders in the United Kingdom always consider trading as the best source of income as it allows the traders to control their profit potential. Though the market offers a high level of profit but maintaining consistency is extremely difficult. Most of the traders in the financial market loses money due to lack of their trading knowledge and discipline. Even some novice traders blame their size of their trading account for the loss. In this article, we will discuss the perfect way to trade the small trading account.
Use price action trading strategy
Price action trading strategy is the most profitable trading system in the world. It allows the traders to execute high-quality trades in the market with the extreme level of precision and most of the time you can use high lot size due to its winning edge. But this doesn’t mean that you will risk more than 2 percent of your account capital in single trade. No matter how reliable the trading strategy is you should always follow the 2 percent rule in the market. If you have a small trading account then you should never trade with a high lot since it might blow your entire trading account. If you trade the highly reliable candlestick pattern with proper risk management factors then within a few months you can easily double your trading account in the market.
Trade in favor of the long-term trend
There is a well-known proverb in the forex market that the trend is your friend. So when you execute any orders make sure that you are trading in favor of the long-term trend in the market. Unlike the professional traders the novice traders tend to trade against the trend and thus they lose a huge amount of money. So make sure that you look for trading signals in your trading platform in favor of the trend. Since you have a small trading account it’s highly imperative that you reduce the risk exposure in trading in every possible way. Most of the time the market tends to move with the trend and for this very reason, the expert traders at Saxo suggest the novice traders follow the trend. If you can simply follow this rule then within a year you will find that your small trading account has turned into big trading account in the market.
Avoid trading the news
The forex market becomes extremely volatile during the event of the high impact news release. So if you are trading with a small trading account then make sure that you don’t execute any trades during the high impact news release. Most of the time the market exhibits lots of false spikes during that time and the traders lose a huge amount of money. However, if you still want to trade the news then make sure that you use price action confirmation signal on the lower time frame and trade with proper risk management factors. If the trade goes wrong then take the day off and start a fresh day from the next day.
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