How to protect my account from huge losses? - page 2
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Lack of experience is the main cause of loss. In start trader should invest a little amount to see how much he is good to manage it . When he will do trading in micro accounts his loss will be low .After it with good investment make a plan for trading to protect from huge loss.
Use order sizes that are appropriate to your account size (the "max 1% rule") and have a clear exit strategy. It is not just about the entry : equally important is when are you going to exit
Just follow the standard rules. The standard figure regarding taking risk is 0.5% and the standard figure regarding profit is 1:1 and you can also use stop loss and take profit tools while trading. Stop loss tool would help you from huge loss and take profit would help you not to be greedy. But my best advice to you that you should learn Forex trading meticulously if you really want to save your account. Otherwise using ST and TP would be a just formality.
The only single and best method to protect your account from bigger losses is to use good money management.
Low risk trading is a way that saves you from huge loss. You account and trading lot counts a lot in making profits and loss. keep in mind loss possibility whenever you are taking risk . Get low profits face low loss and manage your amount according to market situations.
To protect the huge loses, we need to use Stop Loss and set it in appropriate manner..
Money management is the skill which enables the traders to minimize their losses so trader should focus on to develop their money management skills and practice more and more.
We must minimize the risk if we want to protect our account from huge loss. Forex trading is risky business. We must understand that forex trading is not about profit only, but there is risk which we should bear and if we just trade because profit, it will make us blind. So, let's use demo account first to start trading in forex.
I have seen many traders are willing to take high leverage for trading. As s result they become loser. So it is very important to make sure proper leverage that you prefer as your trading experience. Actually, I took a high leverage in my demo account to see how it works. Although it is possible to trade in a big lot by a high leverage but I think it is too risky to lose hugely. So , by taking minimum leverage can protect ones balance.
It is not just leverage. You can take exactly the same risk with 10:1 and 1000:1 leverage. If you do not calculate your risk and lot size corrrectly, nobody and nothing can hep you : not even leverage 1:1