People make mistakes in every aspect of life. In trading, mistakes can happen due to a lack of knowledge or because of unconscious actions. Different kinds of information coming from a reputed source are affecting the market and the trader’s mindset. Coping with all the news and information is not an easy task. The retail traders can also make some silly mistakes like pressing the wrong button or putting a huge lot size due to extreme stress. Before you start your career as a day trader, you should follow some basic steps so that you don’t lose your entire investment. Let’s explore some of the advanced tips that can protect our trading account and boost your performance.
1. Take a look on Economic Calendar
Before starting to day trade, a trader should look at an economic calendar. Many websites provide the Forex economic calendar by which a trader can align themselves with the major news or announcement that can affect the price movement. During such major news and announcement, the market becomes unstable it becomes really hard to deal with the trade execution process. So, avoid placing any trade before high impact news.
2. Check your platform
Whenever you lunch your trading platform you have to make sure that it’s streaming perfectly and no glitch is present due to unstable internet connection. If you feel like your platform is not working properly, then you should solve the problem before start trading. Try to choose the best Forex broker in Australia since they always offer a premium trading environment.
3. Use of multiple accounts
Many traders use multiple accounts, and the information of all account stay safe in most of the platforms. So before start trading, you should always check whether you are logged in to your desired account. Let’s say you used a demo account for self-improvement and did not log out last time. So when you spot a good trade, you placed the trade in the demo account. Even if you make $1000 profit, you have nothing to withdraw since you were logged in to a demo account. So always check your account before placing any trades.
4. Make key notes for yourself
You should make text notes regarding the high impact news and find the key points of any major announcement. When you are busy trading you may forget about the time of the announcement and it can cost you a lot. So making key notes and putting it on your trading chart is highly effective.
5. Use of the pending orders
In many trading platforms, you can set a pending order by which you don’t need to sit in front of the trading station to execute the trade. You can place a limit order with predefined stop loss and take profit. When you use such an approach, you should double-check the trading parameters.
6. Analyze the market condition
A trader must review the market properly before opening any trade. The condition of the Forex market is changing every second. So always take a few moments at the starting of a day to understand the volatility and other key things of the market. Never jump into the trade without exploring the market condition.
7. Risk management
Forex is a risky profession, controlling risk in a must. A trader should not risk more than 1% of his account balance in any trade. Being a new trader, you should also think about the risk to reward ratio. This is crucial since the recovery factor greatly depends on your risk to reward ratio. Those who are smart never trade with less than 1:3+ risk to reward ratio. After doing all the hard work, you might still be facing a few losing trades.
Accept those losing trades and try to find the reason. But never break the rules to recover the loss. Stick to your trading plan so that you don’t make any big mistakes.