Things you must check before taking any trade
Opening a trading account in Singapore is not a tough task. You can open a trading account with a top broker like Saxo and complete the verification process within a few days. Getting the trading account is the first step to take the trades. Though you can fund the account and start placing the trades, it can’t save your capital. You are most likely to lose your entire capital. Unless you have vigorous training and strong skills in the trading industry, you should not trade with real money.
For the safety of the capital, a few parameters must be checked before the execution of the trade. Though you might add more parameters we are discussing the most important ones.
Are you trading with the trend?
The first mistake of rookies is that they try to trade the tops and bottoms of the trend. Using a reversal trading method is very risky and the success rate is very low. If the signal is against the trend, you should not take the trade. Use the trend trading strategy so that you have a better chance to win. Instead of making things complicated, you should start with the trend line tools. Use the trend line support and resistance to find your desired signals. With this simple step, you can boost up the profit and avoid many losing trades.
Are you taking the high risk?
Taking too much risk is very common for the rookies. The rookies have access to a high leverage trading account. Some of them use insane leverage to take the trades. Though it can multiply the profit potential to a great extent it also increases the risk. The risk should not exceed 3% of the balance in any trade. You can read articles on money management, you will take a 2% risk in the trades. For more info you can visit the professional broker Saxo and use their free resources to develop your risk management plan. Unless you feel comfortable with the potential of losing a certain portion of your capital, you should not take the trade.
Use protective stops
Many traders don’t use protective stops in trading. To them, the mental stop is the best way to save money. A mental stop is not going to work when you trade in a volatile market. You must use a predefined stop so that you don’t have to worry about leaving your station. Finding the stop loss for the trade is not a tough task. By following some of the most basic things in trading, you can expect to reduce the loss. Train yourself to find the critical support and resistance level since these are two of the most important things you need to learn to protect your trading capital.
Are you prepared for the unexpected movement?
No one knows what will happen to the financial market. Think about the Brexit event. Even the professional traders didn’t know that the GBPUSD pair would drop more than 2000 pips on such a short notice. You have to prepare for such unexpected events throughout your trading career. The only way you can do this is by following the basic rule of money management. You can’t trade with the money that you can’t afford to lose. If you do, you are going to lose in most of the trades. Always think of the market as an unpredictable variable.
The success of the traders depends on the action. If you can follow the tips carefully, you can expect to make the best out of trading. But this should be done in a very relaxed way. If you are under pressure to take the trade, you are not following the basic rules to ensure the safety of the capital. You must be relaxed and the above-mentioned rules must be followed. Only then you can expect to become a millionaire trader.