Top 3 Forex Beginner Tips That Help You Save Money
As a beginner trader, when you are still learning the tricks of the trade, you should ensure your losses shouldn’t be huge. Here are 3 smart tips that save you money.
1. Smart Money Management
Learning how to survive is the first rule that you should learn, and learn fast! No trades wins every trade, but when you continuously lose one trade after another or lose a lot of capital in a single trade, you run the risk of going broke. That’s why learning how to stay in the game takes precedence over everything else.
Beginners believe that learning and perfecting trading strategy is all that they need, but they are mistaken. Of course, you must work out a profitable trading strategy. But if your money management skills are not of the top drawer and your attitude is not rational, you are not likely to become a successful trader.
The maximum capital you should risk per trade should be 3 percent, and you should have enough capital to take minimum 40 trades.
2. Put a stop loss, always
Trading without a stop loss is foolish and can see you losing a lot more in a bad trade than you should. That’s why every smart trader uses this weapon, and the real smart ones deploy it. That is, put the stop loss. When they open the trade, the rationale behind it is not hard to understand.
It is easy to coax yourself to stay longer than you should in a trade gone bad. However, if you’ve put the stop loss beforehand, you know the exact point when you should cut the trade. The other advantage of putting the stop loss is that your trade will be automatically cut when it hits the defined mark, even if for some reason you are not manually able to close the trade.
3. Set realistic goals
Unless lady luck smiles at you big time, you can’t expect to achieve an 80 percent success rate or generate a return of $20000 with a trading capital of $1000 in eight months.
Set up realistic goals considering your expertise and experience. Once you’ve gained experience and developed expertise, it will be easier to chart out a highly profitable trading strategy.
For instance, let’s say you are an intraday trader and your strategy is to risk 10 pips to win 20. After completing 300 trades, 60% reached your defined target of 20 pips and on remaining you had hit the stop loss. So effectively you won 3600 pips (180*20) and lost 1200 (120*10). That means your gross profit was 2400 pips. Gross because you would’ve paid brokerage fee per trade. Let’s suppose it comes to 1.5 pips per trade. So your net profit was 1950 pips. That is 6.5 pips per trade. So basically you earn 6.5 on every trade.
While 300 trades are too few to give a true picture statistically, you now at least have something with which you can work.
If you need more money for your investments, consider borrowing money from the bank or a licensed money lender. We are the best money lender you will be able to find in Singapore. Our approval time is within 30 minutes and 99% approval rate. In addition, we have the lowest interest rates in the whole of Singapore.