When you execute a trade, it will show less profit potential. This is because the markets are always changing and you cannot predict the trade setups precisely. Therefore, there is a greater chance of high potential losses. For a rookie trader, it is much possible to lose money from the trades. Many will start with demo trading but not everyone will have solid preparation for the currency trading business. The most noticeable issue will come when you are going to trade with real money. That is why every trader needs to prepare his or her trading edge for the real business. Solid trading strategies must be used to secure the investment. At the same time, a trader also must have the ability to identify a suitable market condition. For it, you need to spend countless hours on market analysis and to improve your sentiments.
Thus, you can ensure a decent profit potential from the trades. Moreover, the potential losses will also decrease in size for each trades. Therefore, you have a good chance of surviving the hard world of currency trading. So, focus on the management of the trading business and improve your trading plans.
You need to demo trade to practice
Every trader needs to demo trade to improve trading skills. Even when you have a high probability to win while trading with real money, you need to demo trade because you can improve the trading edge without any tension. As a new Singaporean trader, you will always have a poor quality trading edge. Therefore, your money management will be weak for the trades. The lot sizes will be too big for the trades. This strategy increases the potential of the losses. At the same time, a trader also has poor quality market analysis skills for executing the trades. If you cannot find a suitable position for the trades, it will not let you win profits. Besides, you also need to use stop-loss and take-profit to secure the investment.
So, demo trading needs effort from the traders to improve the Forex trading edge. To avoid big potential losses from the start of your career, you should develop a decent trading strategy with a demo account.
Improve the security of the capital
The first thing any trader should prepare is a solid money management plan. This system will be important for the control of the trading money. Without having any solid control over the trades, you will ruin your chances of executing secured trades. As mentioned earlier, you will have a high potential loss from the trades due to big lots. Therefore, your trades will lose money and you will fail to control the losses. That is why a decent risk management plan is necessary to sort out the investment. If you can think about the right ratio (1% risk per trade) to be used for each trades, it will be consistent for the trading approach. Along with decent leverage (of a 1:10 ratio), you can also increase the lot size without affecting the equity too much.
So, focus on the improvement of your money management plan. Due to high volatility, every trades will have a potential loss with it. So, demo trading account should help you to improve the risk exposure for ensuring the safety of the trading money.
Trade only for a suitable condition
There is another thing which is important for the trading business. A trader needs to improve the execution plan for the trades. Risk management will handle the investment which will keep your head cool. But without a solid trade setup, you cannot make any profits. Moreover, without stop-loss and take-profit, you cannot secure your investment either. That is why you need to improve your trading edge to find a suitable market condition.
The most important advice for rookie traders is to approach a trade only when the retracement of a price trend seems right for your profit targets. It will help you to avoid any potential loss.