How to trade Forex without losing your money.
Trading in Forex requires a certain amount of knowledge and experience. Therefore, a trader's primary goal isn't to make a huge profit, but rather to simply protect their deposit from being lost during the first few months of trading.
Although the task is complex, it is entirely feasible. To solve it, you should follow some recommendations regarding the practical side of the matter, which will be discussed in this article.
I'll try to give beginner traders some tips on practical Forex trading that will help them avoid the mistakes I made in my time.
In order to preserve your capital and then increase it, you need to follow these tips:
1. Optimal trade volume – every trader knows that using leverage can increase your capital several hundredfold, but is this really necessary for real-world trading? Not always, especially if you're just starting out in Forex.
To begin trading, we recommend using leverage of no more than 1:50. Please note that if your deposit is less than $200, you should open a cent account. The minimum trade size on standard accounts is typically 0.1 lots.
Next, open trades, observing the ratio between the value of one pip and the amount of funds in your account. The optimal scenario is when a one-pip movement on Forex equals 0.1% of the deposit amount.
For example: You have $1,000 in your account, which means you trade with a volume of 0.1 lots, and 1 point will be equal to only $1.
2. Always use a stop-loss – set it immediately when opening an order, not later. Only then will you protect yourself from losing your deposit.
The recommended size is between 50 and 100 pips, but keep in mind the market situation and focus on the correction size . This also depends on how long you plan to keep the trade open. The shorter the timeframe, the smaller the stop-loss.
3. Don't use advisors – at least at first, you won't be able to configure them correctly and will end up without money.
There are very few trading robots that can consistently generate profits, and they also require proper parameter optimization.
4. Do not open trades at random , always use forex indicator readings or factors influencing the exchange rate (trading on news).
5. Day trading – try to close all orders within 24 hours, don't leave them open for several days; this will help you avoid additional commissions.
6. Simplicity of trading - at first, don't get carried away with overly complex trading strategies ; you won't be able to grasp their essence, and mistakes will cost you money.
And of course, study, study, and study some more. Only this approach will allow you to find the answer to the question of how to trade Forex without losses and drawdowns and without losing your own money. Don't forget that 95% of traders lose their first deposit within a few days.
