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How to avoid the losing trades in Forex

Losing trades are very common when it comes to the retail trading business. Being a rookie trader, you must understand the associated risk factors in the trading business. No matter which trading strategy you follow, you are bound to lose trades regularly. So, how do the pro traders in the United Kingdom manage their trades? Do they lose any money? Even the best trader in the world loses money regularly. But due to their strong risk management skills, they can make a consistent profit. If you trade the market with 1:2+ risk-reward ratio, even after losing 50% of the time, you will make some money at the end of the month. Trading is all about managing the losing trades. Let’s learn some amazing technique which will help you to avoid the losing trades.

Avoid trading the news

News trading might offer you big profit-taking opportunity still you should never trade the high impact news. Stay in the sideline during the event of major news release since it will save your investment from the wild swings. Some of the pro traders at Saxo might trade the high impact news but you need to consider their experience level. Unless you have more than 2 years of trading experience, you should never trade the major news. At times it’s better to stay in the sideline rather than losing money on the low-quality trade setups.

Follow the 2% rule of money management

Never risk any amount which you can’t afford to lose. The nature of this market is unpredictable. Even after having years of trading experience, you can’t say a certain trade will hit the potential take profit level. You must follow the famous 2% rule of money management to protect your trading capital. Being a rookie trader it’s better to risk only 1% of your investment since it will protect your trading capital from the wild swings of the market. Even if you lose 1% of your account balance its easy to cover-up the loss. But if you risk more than 3% of your account balance, you will become frustrated after losing a few trades. And this will force you to take an unnecessary risk which will eventually increase the risk exposure in the trading business.

Avoid the low-end broker

The rookie traders often prefer the low-end broker to cut the down their trading account. This is a very big mistake. You must open an online trading account with brokers like Saxo since they care about their clients. Without ensuring a professional trading environment in the retail trading business, it’s really hard to find the best possible trades in the Forex market. Though the associated cost involved in the elite class broker is a little bit high, still it’s better to trade with a high-end broker.

Control your emotions

Emotions should never be the prime ingredient in your trading profession. You must learn to control your emotions or else it will be really hard to make a profit from this market. Read books and articles on trading psychologically so that you can make the best decision based on proper logic. Things might seem a little complex at the initial stage but if you stick to the basic rules of investment and trade the market with proper discipline, it won’t take much time to master the art of trading.

Trade the high time frame

To protect your trading capital, you must trade the higher time frame. Never try to scalp the market since it increases the risk of exposure in trading. Being a conservative trader, you can easily find high-risk-reward trade setups even at the complex market condition. Think twice before you execute the trade in favor of the market trend. Forget about the lower time frame trading strategy and create a conservative trading method.