Sooner or later, the non-stop loss trader is likely to generate significant losses. This is a very common mistake in the forex market, causing the closing of many accounts by the margin call? It is therefore imperative to place a stop loss on each position entered in the market.
If you don’t know how to place a stop loss, there is a lot of training (free or paid) to help you understand how to do it. As a part of the bitcoin profit review this is important now.
Do not risk more than 1 or 2% per trade
- Some beginners are not shocked to risk 15 or 20% of the capital in a transaction.
- The main rule of money management in the Forex market is simple. You should never risk more than 1 or 2% of your account in a transaction.
- We may have an excellent trading strategy, but if we do not respect the rules of prudence in risk management, we increase the risk of bankruptcy exponentially.
Making small losses frequently, and making a big profit every now and then, is a good view of what someone should do, to properly manage their capital.
Cut losses early
A common mistake is to accumulate losing positions without wanting to cut them. Because cutting a loss is admitting that we were wrong. And it is not easy.Sometimes we hear that, as long as the position is open, the loss does not exist (the famous saying “unsold, not lost”). However, a latent loss is still a beautiful loss and very real at the moment.It is generally better to cut a lost position and the sooner the better. Because the greater the loss, the more difficult it will be to close the deal.If this can help you, remember that: one does not intervene in forex trading to be sure, but to make money.
Beware of doubling the bet or Doubling Up
This is one of the most common mistakes and one of the worst things to do. It may seem logical when the market drops dramatically, to double its position and lower the cost price.