Few simple technique to save your trading capital

Few simple technique to save your trading capital
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Trading is an art and there is no shortcut to becoming a Forex millionaire. Those who are losing money on regular basis and always looking for bigger profit even though they don’t have enough capital and trading knowledge. There is saying in Forex market that you should never risk more than 2 % of your account capital. So do you know why the successful traders in the United Kingdom follow this saying blindly? They do so because they understand the importance of a positive equity curve in their portfolio.

It’s true that if you take the bigger risks then you can easily make more money but considering the overall scenario, you are increasing your risk exposure to a great extent. You need to learn all the basic details of this market and only then you will be able to understand how to manage your risk exposure to make profit consistently. In today’s article, we will give you few simple tips which will help you to become a better trader at UK financial spread betting.

The golden 2% rule of money management

You might have the precise trading knowledge and the best trading system in the world but this doesn’t mean that you will be trading with a big lot size. Leverage is nothing but a double edge sword. If you can use it in an efficient way then chances are very high that you will be able to make a huge profit from a small trading account, but in the hands of the wrong professionals, it will cause disasters. Being a new trader you should never risk more than 2% of your account capital in any single trade.

Aim for high-risk reward trade setup

Having the perfect risk-reward ratio is crucial for your trading success. When you get involved with professional UK financial spread betting, you have to understand that you will always have to face losing trades. No matter what you do losing trades are inevitable. So the best way to recover your trading loss is to trade with high-risk reward trade setup. For instance, if you risk £100 then you must win £200 from that trade which will give you 1:2 risk reward ratio.

Trade with price action signal

Instead of trading the market with the indicator based trading system you need to learn about price action trading strategy. The price action trading system is often considered the best way to learn the art of trading. If you are completely new in the financial market then you might have a tough time to learn about the different formations of the Japanese candlestick. If you study the psychology behind the formations of the price action confirmation signal than things will be really easy for you.

Learn multiple time frame analysis

Many traders love to trade the lower time frame data.IN lower time frame data you will have lots of trading opportunities but this doesn’t mean that you will be making a huge amount of money. The more you trade the higher chance you will have to lose money. However, if you still want to trade the lower time, than make sure that you learn about multiple time frame analysis. Multiple time frame analysis is often considered the best way to filter the false trading signals in the market. But when you do it make sure you give emphasis to the higher time frame data.

Trade with confidence

Confidence is the key to success in any industry. Being a new trader it’s very obvious that you will not have enough confidence to trade the market. But there is nothing to worry about it. You can easily use the demo trading account to develop a unique trading system. In the demo trading environment everything is same only with one exception. You don’t have to lose you real money since you will be trading with the virtual dollar.

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