Irrespective of whether you’re a professional trader or an amateur who’s just dipping your toes in the shallows, there are always ways to improve your trading strategy. These methods are manifold, and different approaches will have varying levels of success for different people. Hints and tips can be found everywhere: on the Internet, in news articles, during seminars delivered by professionals.
Use Limit Orders: a limit order is the sensible trader’s best friend. It works by allowing you to lock in your desired profit, instructing the system to exit your position when your target amount has been reached. Be sure to sit down and work out what this amount is before you embark, so that the strategy is in place to protect you.
Use Stop/Loss Orders: another important tool in the trader’s armory is the stop/loss order, which gives you control over how much money you’re willing to risk losing. Such an order will work by instructing the system to exit a position when a maximum loss limit—set by you—is reached. This means that you can place a cap on how much you’re willing to lose, thus preventing financial ruin for those savvy enough to utilize them.
Make Use of the Tools at Your Disposal: a common mistake made by amateur traders is not to take full advantage of limit and stop/loss orders. For those who are willing to devote the time to formulating them, these tools can be used to place profit and loss parameters on all trades. This removes emotion from the trading equation, reducing the role of trader to stone cold mathematician. The inexperienced, however, have a tendency to watch their screens religiously, reacting to each movement in every one of their positions. They try to stretch themselves too thinly, miss critical action points and thus jeopardise their whole trading strategy. If, instead, you make use of the tools available to you, this frantic panic and unduly reactionary trading can be avoided.
Of course, trading forex will always carry a risk: that’s the beauty of it. However, this does not mean that this cannot be minimized and manipulated by those who understand the system. It’s up to you to decide whether you want to be one of them.
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.