Risk management appears to be the main part of successful trading on the stock exchange. Risk control in the market requires not only close attention to their size but also a strategy to minimize losses. Follow these tips to diminish your risks:
· Before each transaction, carry out preliminary preparation. Of course, this recommendation is not for scalpers who have to make decisions literally in seconds. When opening a trading position, you should clearly understand the possible financial risk and have an action plan for any scenario of the development of the market situation. View this EXANTE broker review, to learn more about risks.
· Each trader should have his own trading strategy. It can be based on technical indicators, fundamental factors, or a combination of both. Before using the trading strategy, it is advisable to test it on a demo account. Alternatively, you can have it tested on your real account but small lots should be used. By the way, some brokers allow their clients to use small lots. It enables traders to trade real money without risking large sums. Once you are assured that the strategy really works, you can deposit more money to your trading account.
· Diversify your investments: You need to realize that risking 100% of capital by investing all of your money is a foolish approach to stock trading. Instead, you require reducing the risks of your portfolio. The risk per open position shouldn’t exceed 1-5% of your trading capital. For more effective diversification, your portfolio should include financial instruments whose prices are not inclined to move synchronously.
· You need to be able to recognize your own mistakes and control losses. Even experienced traders sometimes suffer unexpected losses. If the market moves against you, close your trading positions partly or completely, thus reducing your risk.
· When trading, try to control your emotions. Of course, it’s not an easy task. However, make it a rule to take a break for a while when you receive a certain amount of losses in a row or if you lose a certain amount of money. Of course, the size of the loss and the length of the break (in hours, days or weeks), it’s an individual matter. So, there aren’t any specific recommendations here. If you have failed while trading within a day, then, perhaps, it will be enough for you to take a break before tomorrow’s trading session. If you use long-term strategies and they have recently begun to let you down, then it makes sense for you to have a rest for several months. During this time, relax, explore the economic situation, wait out some crisis moments, analyze various fundamental factors, and only after this, you may return to stock trading.
Trading with the EXANTE broker effectively
As you know, EXANTE that meets all the requirements of the SEC regulator offers to trade stocks, futures, options, currencies, etc. Perhaps, you think that it doesn’t matter what to trade. However, it makes sense to take some time to make the right choice.
Novice traders aren’t recommended to trade futures and options. First, it’s better to learn stocks or currencies. When choosing stocks from a large number of listings, it is easy to get confused. If you do not yet have much experience in stock trading, avoid trying everything. You shouldn’t make too many trading decisions. Decide on the industry group whose shares you will be dealing with for the first time. An industry group can naturally include more than a hundred stocks, but it is better for a beginner to focus on a dozen.
It is advisable for this dozen to include blue-chip stocks because they are more stable and less prone to unpredictable fluctuations. Of course, from predictable stocks, you can only expect moderate profitability. Therefore, if you came to the stock exchange not as an investor, but as a speculator, then you should not focus only on blue chips. However, act consistently and very carefully. Increase the risk of your transactions gradually. Gain experience and smoothly expand the scope of your stock exchange interests.
If you stick with the EXANTE brokerage, you will have a good chance to succeed. This respected broker offers a unique trading platform developed by itself. The trading terminal is very easy to use thanks to the availability of the Drag-n-Drop feature that enables traders to easily manage windows and panels of the terminal.
The trading terminal offers 150,000 assets that can be traded from a single account.
Read more about Exante – https://exante-otzyvy.ru