By 
If you want to survive in the currency trading business, you need to have a solid trading edge. It must have the potential to control trades properly. On the other hand, it also must ensure a decent execution of the trades. You need to concentrate on managing an efficient trading performance. Thus, you can manage profit potentials from the trades. Unfortunately, the rookie traders only care about big profits from their trades. They do not take care of their trading strategies or methods. Therefore, they lose trades very easily. Many novice traders in Australia lose money with big size trades. You cannot survive with an unplanned trading approach. Your trades must have effective trading plans. The risk to reward ratio must be utilized for balanced trading performance.
If you can use small risk exposure for the trades and aim at small profit potential, it will help you stay relaxed. Then your trades will also experience suitable market conditions. So, with appropriate trade setups, you can manage a decent profit potential from every trades. That is why you need to start planning with effective trading strategies. Along with every necessary elements like market analysis, position-sizing, etc. you need to think of the risk to reward ratio. To motivate the rookie traders for a decent risk to profit margin, this article will mention a few valid points.
You can lose any trade in Forex
Any trader can lose money after placing a trade in the Forex markets. And you cannot predict which trade will end up as a loser. As this industry has high volatility in its markets, no instrument will provide you solid profit potential. You need to manage it with your market analysis skill. Unfortunately, a rookie trader does not have enough ideas or knowledge of trading in Forex. Moreover, the trading mind also lacks appropriate market analysis skills. So, losses are inevitable for the rookie traders. That is why a trader must define proper risk exposure for the trades. As you have a high chance of losing money, trade with a very low-risk factor and look for the best trade setups in your trading platform. Invest low and execute a small lot size in the marketplace. Thus, you will be secured with minimal losses. It also improves the survival skill of the traders.
Develop a money management plan
It is appropriate to think of simple risk exposures for the trades. But you need to develop a secured plan for it. Most importantly, the plan must stay consistent for every trades. To fix your lot sizes you need to follow a decent risk per trade strategy. Use a 1% money management policy to invest in the trades. Then, select an adequate leverage ratio to increase the lot size. When you will trade with currency pairs, it is necessary to execute a decently sized trade. That is why the leverage ratio must not be too big than 1:10. It will remain comfortable for your novice trading. Using this money management plan, you can also concentrate on every single trades. So, you need to follow your heart to keep your head in the game. For every execution, you must stay relaxed with the investment policy.
Follow your comfort level
The money management plan will help to control the investment of your trades. But for the risk to reward ratio, you will need a decent profit target as well. To execute a trade, you need to use a decent profit target. It will help with the market analysis, as you need to find a trade setup. Based on your market analysis skills and overall trading quality, you need to choose the profit targets. It must not be too big to satisfy with your trading edge. Instead of big profit potential, think correctly and follow your trading method. If you are short term trading target a 2R profit potential. In the case of long term trading and an efficient market analysis skill, you can use a 5R profit target. Set a target for placing a trade and look for a suitable signal.
Comments