How to develop a perfect trading plan

How to develop a perfect trading plan

Making money as a currency trader is a very challenging task. The majority of investors don’t know the proper way to trade the market. They execute the trade with emotions and loses a big portion of their investment. On the other hand, the professional traders in Hong Kong always trade the market with a valid strategy. They never take unnecessary risks even though they have a huge amount of capital. You have to learn the proper way to trade the market with low-risk exposure. Taking too  big a risk in each trade is not going to make you a profitable trader. Let’s discuss some of the key steps which you must follow to develop a perfect trading edge.

Find the perfect broker

Without choosing the best broker, you will have a tough time trading. To ensure a premium environment, chose a broker like Saxo where you can do the advance market analysis with a precise price feed. Some of you might say, the high-end brokers like Saxo has high initial deposit requirement. But if you consider this as an issue, you are not going to make it in the long run. The low-end brokers never give you a perfect trading opportunity. Most importantly, you will face many technical issues and eventually blow up the trading account.

Know your risk tolerance level

Trading is all about managing the risk exposure.Those who can embrace the losses with confidence are going to make a profit in the options trading industry. But learning to accept the losing orders is very hard. Most of the time, the new traders don’t even know their risk tolerance level. Being a new trader, you should start risking only 1% of your account balance. Though things will be very hard at the initial stage you must learn to trade this market with managed risk. Taking a high risk in each trade results in a huge loss.

Trade in the demo account

The demo account is the perfect place to learn to trade. You might get bored with your demo trading performance but this is the only way to create a perfect trading system. Some of you might think to trade with real money but this is a big mistake. What’s the point of risking your real money when you can trade the market in the demo account? Take advantage of the demo account and try to develop your skills. Once you feel comfortable with your demo trading performance, switch to the real account.

Consider the high impact news

Those who are new to trading, always think that technical analysis is the most important element in trading. But in reality, it’s just a part of your trading profession. Unless you learn to analyze the fundamental variables, it will be really hard to make a consistent profit. Never try to ignore the low or high impact news since the price movement is greatly affected by such events. So, how do we learn fundamental analysis? Learning fundamental analysis is not all hard. Focus on the major news and scale your trade accordingly.

Stop being addicted to this market

New traders often become addicted to the trading profession and lose a big portion of their investment. If you want to make a profit, you must not be addicted to this market. Never try to make a huge profit by increasing the lot size or risk factors. Trade during the specific hours and focus on simple logic. Forget about the complicated trading method since it never helps the retail traders. If you ever feel addicted to this market, take a small break and spend time with your family members. You don’t have to trade 24 hours a day to make a decent profit. A few good trades are enough to ensure your whole monthly earnings. So, think twice if you feel addicted to this market. Follow conservative steps in trading.

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