People always trade to earn a big profit. They don’t spend enough time developing their skills. Eventually, they start losing money. It’s not like they don’t have any basic knowledge. It’s more like they have completed the strategy in a rush. In order to survive at trading, you can’t rush in the learning stage. If you find yourself losing money after trying everything, you have to relearn the trading business. There is nothing wrong if you start learning from scratch. In fact, it’s a good sign that you have admitted the fact that you have things that you still need to learn. Let’s find out about the amazing steps we can follow to relearn trading
Trade with the demo account
The first step is to trade in the demo account. There is no reason to trade with real money when you are losing a bunch of money. The demo account will provide you the perfect environment in which to learn new things and this will boost the profit factor to a great extent. Though it will seem hard at the initial stage, you can develop your mental stability. The reason why you need to start with the demo account is mental stability. Unless you can trade with discipline, you are not ready to trade the real market. Stick to the demo environment for a few months and it will help you to develop your patience level.
Create a trading system from scratch
Forget about the past trading system that you have used. Create a new trading system so that you can take the trades without having any problem. Due to the dynamic nature of the Forex market, the professionals at Saxo often revise their trading methods. So, start all over again is nothing but an opportunity to create a better edge. During the strategy development phase, you have to carefully create the trading method. Try not to create a trading method that will allow you to trade against the trend. You need to create a trend trading strategy because it has low-risk exposure. Test it in the demo environment and bring changes to it to adjust the system.
Develop your risk management plan
The reason why you are relearning the things is often because you had a poor risk management plan. You have to spend a decent amount of time developing your risk management plan. Unless you can trade with proper risk management, it will be a tough task to survive. You might be winning more than 90% of the time still you will be losing money. You have to trade with 1:2 risk to reward ratio and this is the only way by which you can secure profit at trading. There is no reason to become an aggressive trader with your approach. Follow the safety protocols and try to come up with a unique solution. Focus on your risk management plan. No matter how well you understand the market, you should not risk more than 1%. Safety should be your priority.
Learn to analyze the news
Ignoring the news factors is another key reason why retail traders are losing money. You must learn to analyze the major news in the Forex market. Having the ability to understand the fundamental factors of the market gives you an added advantage. News data are more like leading indicators. If you can determine the news properly, you have a great chance to make a profit. In fact, you can spot the major reversal in the trend by learning to trade the major news. Things are not as complex as they seem. Just focus on the news articles and see what the professionals can tell you about the economic condition of a certain country. After spending a few weeks doing this, you will be able to take trades with discipline. Most importantly, you will feel more confident in your trading approach.