The rookie traders are joining the trading community with a big dream. They start trading the market with a big hope thinking that they can trade the market like skilled Aussie traders. But things are not as easy as it seems. Though brokers like Saxo will give the perfect environment for trading, still you have to work hard to develop your skills. Without understanding the core concept of trading, no one can become a successful trader. In this article, we discuss 5 golden rules that can help the rookie traders in the Forex market.
Analyze your personality
Being a new trader, it’s very obvious to follow other people’s advice. The rookie traders often start trading the market without developing their trading strategy. You need to analyze your personality before you start trading the real market. For instance, if you start using a scalping method, you have to trade with high risk. Some of you might not feel comfortable trade with such an aggressive strategy. For this conservative or position trading strategy is the perfect solution. To analyze your personality before you start trading the real market. And based on that you need to create a trading strategy.
Reinvest your profit
Stop investing more money from other sources. You don’t have to deposit a big amount to trade the market like the pro traders. The pro traders can make consistent profit from this market since they know the perfect way to manage the risk exposure. Most of the naïve traders are losing money and depositing more funds. Instead of doing that you need to reinvest the profit to increase your account balance. By doing so, you will learn the unique way to make a consistent profit.
Trade the major pairs only
Trading multiple assets increases the risk to a great extent. Being a new trader in the options trading industry you need to follow a conservative trading strategy. Instead of analyzing the cross currency pairs, you need to look for quality trades in the major pairs only. The major pair trading strategy is one of the most effective ways to make a profit. Those who are relatively new to the trading industry might think this will limit the profit factors. You don’t have to trade too many pairs to make a consistent profit. Stick to the stable asset and you will be able to filter out the best signals. Most importantly your trades will not get closed due to wild spikes. So chose the trading asset very carefully as your success depends on it.
Stop adding to the losing positions
The rookie traders always to the losing position with great hope that the market will go in their favor. But by doing so they increase the risk factors. You need to use a simple method in trading. Never open more than one trade in the same currency pairs. If you do so, you are going to lose most of the trades. Before you start adding any losing position think about the worst-case scenario. Though you might recover the loss, you are developing a bad habit. Trade with defined stop loss and take profit so that you don’t have to trade the market under stress.
Trade with a simple strategy
You should never think the complicated trading strategy is the best way to make a profit in the Forex market. Look at the experienced traders and you will understand why they are making a consistent profit. All the successful traders are using a simple method to place the trade. If you intend to change your life, you must act like skilled traders in the Forex market. Try to develop a simple strategy by using price action signals. Learn about the chart pattern trading strategy since it will protect you from the major reversal. You can also trade the reversal with a high level of accuracy just by using this concept. Last but not least, never lose hope in trading.