Everyone thinks trading is a straightforward task and starts trading without knowing the details of the specific market they are into.
Some of the novices start with a very high leverage trading account and intend to make a quick profit. But it would help if you never tried to make quick money in this market. If you do so, you will be losing most of the capital within a short time.
The professional traders strategically manage their trade so that they don't have to lose more money from a single trade.
There are many ways by which you can protect your capital, but in this article, we will highlight the most promising strategies.
#1. Follow the trading routine.
You need to follow a specific trading routine as it will help you to take the trades systematically. If you randomly take trades, you will lose most of the money within a short time.
Please have a look at a professional trader and follow their steps. While developing that trading routine, make sure you are not making it complex. If you try to trade the market with a complex trading routine, you will lose money most of the time.
Trading should be done simply, and only then can you expect to make a big profit without losing too much money. So be smart with your actions, and you should be able to earn more money.
#2. Learn to trade with the trend
Trend trading strategy is one of the most effective ways by which you can make a big profit from this market. However, to analyze the trend, you have to rely on the daily or the hourly time frame.
Some might say higher time frame trading is very boring, but it is the most efficient way to find good trade signals. Learn about the different phases of the market trend and use the Fibonacci retracement tool to execute the trade at the end of a corrective move.
Take a look at this site and learn more about the trend trading methods. It will allow analyzing the market better, and you can avoid many common problems. But, remember, nothing is absolute in the Forex market. So, be prepared to lose some trades.
#3. Stop overtrading
Overtrading is the key reason for which the rookies are losing money. The novice traders think that by trading more, they can change their life fast. Unfortunately, you don't have to trade more to earn more money.
To make your life better, you have to learn the proper way to find quality trade signals. Learn to analyze the candlestick pattern and execute the trade at the key support and resistance level.
Take your time and find the faults in your system. Developed you fixed sets of rules so that you don't have to trade randomly.
#4. Trading with high leverage
The traders often start trading without knowing the risk factors. To protect your trading capital from the big losses, you need to trade the market with managed risk factors.
At times you might have the urge to trade with a big lot, but this is where you need to gain control over your emotion. Unless you learn to control your emotions you are going to lose money most of the time.
Stop thinking about the big profit and try to find the high-quality trade signals in favor of the existing trend. And make sure you are not using leverage more than 1:10 as higher leverage increases the overall risk exposure.
#5. Avoid the news
As a novice trader, you should avoid trading high-impact news. This is because the market becomes extremely volatile during the high-impact news release, and it becomes nearly impossible to make a consistent profit.
So to protect your trading capital, you must learn to trade during the stable hours of the market. By doing so, you will be able to manage your trade more efficiently, and thus you will succeed as a retail trader.