Blowing up your trading account is a very common problem. More than 90% of retail traders have blown their trading account once in their life. Those who have strong learning skills and control over their emotions have managed to create a unique trading strategy by which they are making consistent profit. Learning to trade the market like the elite traders in Hong Kong is not an easy task. Most of the rookies fail to control their greed and emotions and blow up their account. After that, they become more aggressive and invest more money to recover their losses. At the end of the day, they again blow up the trading account.
There are few things you can do as a currency trader after blowing up the trading account. If you can follow the tips of this article, you can expect to become a skilled trader in less than six months. Let’s explore the tips.
Table of Contents
Take A Short Break
After blowing up your trading account, you need to take a short break. The break will give you the time to think about your trading skills. In most cases, those who start trading after blowing up the account, can’t control the aggression. They consider the trend as their enemy and try to trade the reversal. Soon they again lose a big amount of money. But if you take a short break, you will be able to think about the market condition and this will help you to reevaluate your trading system. In most cases, the break can 1 week to 4 weeks long.
Find The Weakness
The professional traders at Saxo always revise their trading methods. If you navigate to this website, you will find many tips written by the pro traders at Saxo. Use those tips to find the weakness in your trading method. Once you have filtered out the weakness in the trading strategy, you can find a demo account and develop your trading method. Without revising your trading method, no one can become a successful trader in the Forex market. Though it will be tough to cope with the emotional stress it is the only way by which you can make a big profit in the long run.
Learn A New Trading Technique
If you are blowing up the trading account regularly, there is a high chance your trading system is a loser. You have to create a new trading method and try to make a profit in the real market. During the development of the new trading strategy, make sure you pay attention to the risk to reward ratio. Without trading the market with a positive risk to reward ratio, you can recover the loss. The rookies in Hong Kong always take a bigger loss and close the profitable trades too early. For this reason, they lose most of the time.
Once you have a valid trading method, you need to back-test the trading strategy. Without back-testing the trading strategy, you should not try to trade the real market. Skilled traders always give emphasize on demo trading since it helps them find the weakness in their trading method.
Create A Money Management Plan
Those who don’t want to blow up the trading account for the second time should create a money management plan. With the help of a money management plan, the traders can find some great trades in the market. The majority of retail traders are failing to make a profit since they don’t know the perfect way to manage the risk exposure. After losing a few trades, they take a high risk to recover the loss. Eventually, they blow up the account. But if you trade with managed risk, you are never going to lose entire capital. So trade the market like the professionals and follow a risk management plan.