Do you know one common saying in forex? If you want to put your money safely in the market, do not put your money all in one trade. Traders became greedy and try to anticipate the market. It is important that you understand the risks of Forex market. This market is never the same. You cannot expect to have the same outcome in different trades. In this market, you have to divide your money if your different trades. The professional traders at Saxo always make sure that they are following proper risk management factors in every single trader. To be precise they never risk more than 2 percent of their account capital in any single trade.
Suppose, you are a famous trader in the exchange traded funds community. Every trader knows your name in Forex and many traders also follow your strategies. You have millions of dollars in your balance. You trade many trades on the market. Do you put your million dollars in one trade? The simple answer is no. You do not risk your whole capital in one trade. You have divided your money in your different trades and this why you are a successful trader in the market. This market is volatile and you can easily lose trades.
Even if your strategy is right, you have correct money management plan, yet you can lose trades in the market. This market is unpredictable and this why professional traders in the exchange traded funds community do not put their money in one trade. You have to divide your money in different trades. This division of money is also managed by your strategy. If the market movement is going to your favor and you are confident you can win this trade, it is natural that you will place more money in this trade. If the market is going slow today, you will not place much money in your trade in the market.
Execute high-quality trade only
This is the old tale of Forex. You have to place money if you see money in the market. If there is no money and you are placing trades, your money will be sucked up by the market. You have to know how to place money on the trades and keep trading with your capital on the market. If there is no money in the market, simply do not put money. You are trading with money in the market, if you cannot make money, it is better to avoid placing trades. Traders find it hard to stop trading in the market and put their money in one trade. They always want to make a big profit in every trade and they lose their money.
Holy Grail in forex
Most of the novice traders in the forex market often ask if there is any holy grail in the forex market. The simple answer to this question is yes. Risk management factors are often considered to be the Holy Grail in the exchange traded funds community since it allows to become a profitable trader even after having more losing trades in the market.
Summary: Trading the financial instrument is all about probability. If you want to become a successful trader then you need to learn how to take managed risk in the market. Most of the novice traders in the financial market is losing money since they don’t trade with proper risk management factors. So make sure that you trade the live assets with rational logic with proper money management.