Protecting your trading capital in the long run

Those who are relatively new to the trading industry don’t really understand the importance of having a risk management policy. The new traders jump into the retail trading business without knowing the risk factors associated with this business. According to recent statistics, more than 95% of retail traders are losing money. Even after having access to free educational resources, why so many traders are losing money? There is various reason behind such loss. However, if you follow in the footstep of the professional traders in Hong Kong you will never have to blow up the trading account.

Managing your trading capital over time, is a very challenging task. But if you read this article very carefully, you will learn about the key ingredients which can protect your trading capital. Let’s dive in.

Educate yourself properly

You need to educate yourself or else you should never start to trade the market. Many people often trade the market only to test their luck. But do you really think luck has anything to do with your profit factors? As a novice trader, learn the three major forms of market analysis. Understanding the technical details of this market is fairly easy but when it comes to fundamental factors, the retail traders often get scared. But fundamental analysis has nothing to do with the complex economic variables. Just learn about the impact of the major news release, and it will be more than enough to help you find great trades.

Trade with a well-reputed broker

You must trade the market with a reputed broker to protect your trading capital. Visit to learn more about the features offered by high-end brokers. Being a new trader in Hong Kong you might think the high-end brokers have high initial deposit requirement and leverage is very low. But over the period of time, you will realize such approach is nothing but to protect your trading capital. The high-end brokers never trade against you to make a profit. They simply make money from the spreads and commissions. So, chose your broker very carefully if you really want to make some progress in the trading industry.

Follow proper money management

The risk tolerance level greatly varies from trader to trader. But this doesn’t mean you will risk more than 5% of your account balance on any single trade. You might have extensive experience with retail trading business still you should never risk more than 2%. Try to follow the conservative trading technique since it will protect your trading capital in the long run. Forget about the low-end broker since it always results in heavy losses. Think twice before you execute any trade since you can’t change anything once the trade is live.

Get professional trading course

Learning from an experienced trader is a great way to protect your investment. The pro traders will give you a clear guideline to trade the market. If you follow the basic steps of the pro traders, you will never follow an aggressive trading strategy. Some of you might think investing money in a trading education is just a waste. But in reality, this will be the best investment in your life. But make sure you chose a mentor very carefully. He or she must have a proven track record in the financial industry.

Train your mind

You need to reprogram your mind to become better at trading. Unless you work hard and learn the details of the market from scratch, it will nearly impossible to make profit consistently. Once you create a balanced trading strategy, you need to embrace the losing trades on a regular basis. You might lose four trades in a row. It’s absolutely normal. A few good winners will cover the loss. So, train your mind so that you can deal with the ups and downs of this business.