Manage a consistent trading performance
If management is mentioned in any trading related article, risk exposure will alarm your senses. But the concept of management goes beyond the risk factor. You need to control your trading business with management plans. The trading approaches must be consistent with a decent procedure. On the other hand, you will also need to follow a concrete trading method. But the most important implement of the management plan will be for controlling the investment. If you can handle every procedure, there will be no conflicts in the trading business. You can handle the losers with a solid trading strategy. Most importantly, you can execute profitable trades with a solid trading skill. As the trading edge will improve, you can ensure an efficient performance with currency instruments. So, you must focus on managing the trading peripherals.
Today, we will discuss every aspect of trading which need a constructive management plan. The following segments will be based on different procedures of currency trading. So, you must read them carefully and improve your trading strategy. Understand the context and develop your trading mindset accordingly. Being a new Aussie trader, try to secure your capital with simple trading plans. Stay disciplined to avoid any immature mistakes and avoid the losses.
Table of Contents
Stay consistent while you are trading
Consistent trading performance requires a well-developed plan. And every trader should prepare for doing business in Forex. For a rookie trader, it is more important to ensure a secured trading plan. It will emphasize more on the money management. With important rules like a safe risk per trade strategy and a decent leverage ratio. If you use 2% risk per trade policy it will help to reduce tension in options trading. Adding to the investment, leverage the lots with a decent 1:20 ratio. This process can ensure the security of trading money.
Along with a consistent money management plan, develop an execution plan for the trades. Your preference will help to design the trading process. You must utilize the fundamental and technical analysis to study the market condition. For every trades, you need to set stop-loss and take-profit. With a solid and consistent trading plan, you can handle the trades properly.
Improve your money management skills
Money management means nothing but reducing the investment in each trades. As mentioned earlier, you will need a decent risk per trade strategy with a 2% exposure. To use margin trading for the lot sizes, you will need to find a safe ratio like 1:20. It may seem the end of money management but, you need to justify the plans to trade in a live market. Demo trade first and see if your money management is suitable for you. If it is too much to handle, you can reduce the risk per trade to 1%. Then you can also reduce the leverage with a 1:10 ratio. This way, it will be suitable for you to trade without any tensions.
So, the idea is simple; you must test the money management plan first with demo trading. Then you need to implement a valid one for your trading style. As demo trading creates less fear of losing money, you need to prepare your mindset for the live trades.
Follow market analysis rules properly
Along with money management, management should be there with the trading approaches. As the idea is to stay consistent and disciplined, you need to develop a trading rule. Your scale should never change for a particular market condition. Even if there is a losing trade running, you need to keep your stop-loss fixed. If you change the stop-loss, it can cause you a big loss. But, a trading plan needs a solid market analysis skill. If you study the market with inconsistency, it will increase vulnerability in your trading mind. You can start micromanaging and ruin your trading quality.
Micromanagement keeps a trading mind business like overtrading. You need to avoid giving too much stress to the trading mind. Otherwise, big losses are inevitable in your trading business.