There are some rules that you should follow, in order to not ‘Gambling’ but ‘Investing’ in the market.
Beginners of trading are probably in the most difficult situation among all the participants of Forex market.
Quite often they have to pay for mistakes which they make because they are not aware of all the details of trading.
That is why any beginner of trading might need some advice from experienced traders in order to get a better understanding of processes taking place in the currency market.
Suck kind of advice is always helpful if you take it seriously, it can be useful, prevent from unnecessary risks and consequently undesirable effects.
Trying not to lose rather than making profit
At first a beginner of trading should focus on the detailed study of 2-3 trading systems, a pair of technical indicators and gradually deepening knowledge try to develop an individual trading system in the currency market.
Making transactions to buy or sell some assets it is important to remember that the total amount used to open an initial position does not exceed 10% of the deposit.
It is necessary to keep away from transactions which can lead to the loss of more than 5% of the deposit.
The study of such instruments as «Take Profit» and «Stop Loss» can be quite efficient.
In this case one should move these instruments only in the direction of decreasing loss and increasing profit.
Although it is better not to be carried away by these movements as a sharp price bounce can easily take away a set Stop-Order which can lead to unplanned losses.
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Not Gambling But Investing
The development of the individual trading system is a necessary condition of success in the currency market trading and it should be taken by any trader for granted.
The system of trading should be as easy as possible and go with conditions of the currency market.
However, it is worth noting that success at trading with an individual Forex trading system is not always achieved by not only a lot of beginners but also experienced traders.
The main reason of failures is the lack of discipline among traders, the failure to take into account all the signals of the system, react correctly without losing time to open and close trading positions.
Poorly managed emotions, thirst for gambling, a wish to make quick money, fear can frequently destroy the trading system developed by the trader.
Gambling is possible only within reasonable limits as undue risk too often brings to ought not only all the previous profitable transactions but also leads to a complete loss of funds.
It is certainly important to come up with funds which a beginner brings to trading in the exchange market.
Here it is recommended to follow the advice:
- The amount of funds invested in trading should be within 50% out of the whole capital supposed to be used in Forex transactions.
- The amount of funds invested into one market should not be more that 10-15% from the capital dimension.
- The risk of one open position should not exceed 5% from the amount available on the deposit.
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