More than 90% of the people start options trading without maintaining the rules and regulations properly, and as a result, their accounts get deleted in six months. But if beginners in Singapore follow some cardinal rules to execute their trades, it can be work as a profitable endeavor. Here we will discuss the core rules those most be maintained with care for a ceaseless trading environment.
Best rules for trading:
Avoiding the get-rich-quick scheme
Trading is a skill which must be achieved with patience, and if anyone thinks that with this business, he will get rich overnight, then it will be proved so pathetic in the end. Studies show that at the beginning traders lose in most of the trades than their winnings, and it is highly recommended that before opening a trade in the real account newbies should be aware of the financial instruments of the Forex using a demo account. A demo account is like the real account with all the virtual currency pairs, but the only difference we find there it is totally free to use.
Concentrating on only one or two currency pairs
Newbies want to be the jack-of-all-trades and lose the concentration easily. Focusing on so many currency pairs can wipe out the capital easily, and for this reason, experts deal with only one or two currency pairs at a time which provides huge opportunity to be concentrated on their goal.The popular currency pair is EUR/USD, which provides the best spread and most of the time, cut down the cost in a great extent. One must be savvy because sometimes, currency can be unstable to deal with. Try to trade with Saxo Bank as the offer different trading instrument which improves the chance of making profit.
Keep updated with financial news
Beginners must keep themselves updated with financial news and take the steps based on technical and fundamental analysis. The market is so volatile, and that is why experts advise waiting at least 15 minutes after news has been released for buying a financial instrument.
Following the trade experts
Following the analysis of the Forex experts can be the best option to be updated with the trends and newbies can keep connected with them using forums, YouTube and other social media platforms. There is good practice, and that is writing the important points while reading the analysis of the expert traders because these notes help later to take any important decision regarding the business.
Having a plan
Without having a plan or strategy, it will be really tough to conduct FX trading successfully, and beginners should keep in mind that the FX market is not a casino where you are joining to gambling. Investors must create a comprehensive strategic plan which will help them to take different steps based on different situation. An effective business plan provides the guidelines to overcome a hostile situation executing necessary actions.
The risk to reward ratio
Everyone must calculate the risk to reward ratio before buying any financial instrument because it helps to predict the upcoming market condition. According to experts, the best risk to reward ratio is 1:3 and focusing on this calculation, practising a money management system can be very helpful to reduce the sudden loss in future.
Forex amateurs ignore the benefits of setting a stop-loss order and leaves the market, losing everything. But if they set a stop-loss order, then it can save them from the sudden downtrend and will not make their trading account zero. Experts do not change the position of their stop-loss order point repeatedly, and their steady actions provide the best outcome at last.
These are the fundamental rules to remember in FX trading, but we should not think that we will follow only those because there are so many unwritten regulations and customs in the market which can be known with practical experience day by day. Continuous study and maintaining an emotional balance may help the investors achieve success over the hard and fast rules.