How can You Protect Your Trading Account Balance
Are you having difficulty with protecting your forex trading account if that is the case, here are four basic tips to protect your account.
If you have been reading through our recent publication on Forex Trading, you will probably know that the safety of your fund is in your hands mostly. Forget about the relationship You share with your broker’s manager, just because you do have a relationship doesn’t guarantee that they wiltake responsibility for your fund. Thats why you need these tips to safeguard your account. Below are what you should do?
1. Invest Rightly
First thing first in everything is doing what is right and also wise.
The forex market is a risky market for retail traders. So, in order to ensure safety starters should know that all your investment is at risk. It is not wise to sell your property or collect money from your credit card and invest in a forex market. So it is risky when you do the above and you are at your own risk if anything happens and no one should be blame but yourself.
Protect Your Trading Account Balance
You should invest the money that you are ready to lose. This simply means that. Investing in the forex market will put you extra pressure on your mind especially trading with bigger amount of money. It is therefore, advisable you make the right decisions by investing what you can loose.
2. Usage of appropriate Risk: For every money transactions reward is a motivation and so reward
It is a very vita and crucial aspect of the forex money management system. In a single trade, starters are advise to take the risk of an amount that is lower than the reward. Why because the standard ratio for risk is; reward is 1:2. Even though, this standard can differ from the trading style, depending on the accuracy of the analysis at a given point of time.
So is logical to know that if a beginner use a wrong risk: reward for a trade may lose and the equity follows gradually. Therefore, it is never a wise decision to take the risk of $200 with a reward of $50. Beginner so remember that before applying a strategy in the real market, they should ensure they check the risk: reward; otherwise, they might fail to protect their trading account balance.
3. Withdraw Regularly
Most people will be asking why with draw instead of saving it for future purpose. Well it is not like that your broker will take you all investment into their pocket. Their earning comes from your spread. So, it is important to know that there is some uncertainty in the forex market. In case of the uncertainty, your broker may fail to give protection of your trading account balances as you have seen in the CHF crash in 2015 for instance. So making regular withdraw will provide you with extra security for your investment.
But note also that making withdraw will decrease your profit percentage, as you cannot increase the lot size with small deposits. Therefore, you should maintain a balance between the withdraw and the current required investment.
4. Choose a Regulated Broker
This is a very delicate part of Forex Trading. A well- regulating authority will not allow a broker to provide high leverage in their trading account. So, with smaller leverage, you can trade with smaller risks, and therefore you will get smaller benefits. The critical part of a regulated broker is that it provides negative balance protection. This will help you from unnecessary risk that might cost you lots of money.
If these 4 tips have been helpful please help us share this articles to your friends and family who are into trading.
Leave a Reply