Most people lose their fund in Forex because they do not have a plan for preserving their investment. It is one of the crucial things that you need to focus on your strategy and also in your career. The capital serves as a fuel that keeps you going. The moment your deposit vapor from your account, it is the moment you say goodbye to your career. This article will tell you why you need to save your deposit at any cost. Remember it is an online market where operations can be executed within moments. The broker does not need to send you a letter saying he is closing your account. When your account is empty, you automatically are signed out of this industry. Read this article and you will realize it is the most important part of building a career in focus.
The simple 2% rule of risk management
The more you will trade the better you will become at risk management. Some of you might think trading is not all easy as you will have to risk a significant portion of your investment. The retail traders often don’t understand how they should trade the market but if you look at the experienced traders you will slowly understand the importance of a proper risk management plan. Things are a little bit complex for the novice Singaporean traders but if you trade with discipline you can easily earn a lot of money.
When you do the market analysis, try to focus on the long-term trend. Those who scalp the market can never find good trades even though they have access to the premium trading platform. In the lower time frame you will always have to deal with a false spike and most importantly the risk-reward ratio will be extremely poor. Take your time to know more about high-risk reward trade setup. If the required demo trades the market for the first few months to understand how this market really works.
Capital preservation should be your first concern, trade in a segregated account
The thing that you should worry about is your fund. It is your share of money and the broker does not have access to your account. If you are trading in a managed account, the broker will also have part of control to your trades. They may use the fund for their own benefit and this is why opening a segregated account is always suggested. It makes sure your funding is not used for other purposes and it exclusively belongs to you. Check your broker when you are depositing money. If they do not provide segregation of client account, look for another broker. Preserving capital is a challenge when the account is not segregated and there are chances of misuses. Focus all your attention towards managing your money and you will automatically get successful.
Saving money also saves you from losses, ultimately leads to profit growth
If you analyze the concept form a different perspective, you will understand it has also many hidden benefits. One of the benefits is it automatically boosts your profit. A trader is said to be profitable when their trades are a winner and they get a profit form the industry. It is included in their account and the investment gets bigger. If you do not lose your capital, it increases the size of your account and it also tells that you are having a consistent profit even if you have few losses. The professional traders have been doing these for years and they are always the winners.
Losing capital marks the end of your journey
Forex is an adventure and it presents you with many opportunities that can turn your career amazingly if you can use them right. Your journey starts with your deposit and losing it marks the end of your trading career. Whatever you plan, always keep in mind the saving of your fund.