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We all know that 95 of the traders are losing money but this doesn’t mean that this market is not profitable industry. In fact, it is one of the best places to change your life. If you can truly master currency trading profession you will never have to worry about your financial crisis. The new traders always blame the size of their trading account for failing in the industry. But they don’t realize the fact that due to improper position sizing they are losing a big sum of money in each trade. The professional traders in the United Kingdom are making tons of money with a very simple trading system. They don’t make things overly complicated as it reduces their winning chance. Being a new trader you might say that you know all about this industry but in reality, you know everything but not perfectly. Today we will discuss the most common misconception in the trading industry.
Table of Contents
The simple rule of 2%
Everyone follows the simple 2% rule of risk management yet they blow their trading account. But do you really think that the new traders in the United Kingdom know this simple 2% rule? If it was so, they would have never opened more than one trades in a single day. You might be a little bit confused by reading this line but there is nothing to worry. We will make things crystal clear to you. In any day your maximum risk exposure should be 2%.This means if you want to open two trades, you need to take 1% risk in each trade. If you can follow this simple thing, blowing your trading account will be a very hard task for you. This is the advanced use of risk management factors which allows the traders to make a huge profit in this industry.
Patience
Do you know the meaning of patience? Waiting on the sideline for weeks and watching your trading platform for potential trade setup is not patience. It’s called addiction. By the word patience, its represents the smart activity of the traders. You need to let go the low-quality trade setups and wait for the best trades. Even after waiting for one month you might lose a trade. This is very normal in currency trading. Nobody can give you the guarantee that you will win a certain trade in the Forex trading industry. You have to consider the probability factors to become successful at currency trading. Look for high-risk-reward trade setup so that you can easily recover your loss. As a full-time trader, you need to develop a perfect trading routine which will help you to deal with this market. But before you develop a trading routine, make sure you have complete control over your emotions.
Searching for the Holy Grail
Are you looking to develop a unique trading system which will help you to win all trades? Are you trying to avoid the losing trades? If so, you have to stop doing this right now. There is no holy grail in the Forex market. No matter what you do, you will always have to face losing trades. For this very reason, the expert traders always trade the market with low risk. They often tell that perfect risk management is the Holy Grail in the trading industry. If you start reading books and articles on Forex trading industry, you will gradually understand that no one has the power to predict the price movement with 100% accuracy. So how do you deal with such market? This is where the probability theory comes into action. Your winners must be bigger than the losers or else it will be really hard for you to make a consistent profit. Ask the professional traders about this trading industry and they will also tell you the same thing. So be prepared for to learn new things to become successful at currency trading.
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