Do you know that most traders start their career by trading offensively? They are aggressive in their trading and they try to put all their capital at stake. It may seem like a brave decision but it is not. Taking the bold decision when you are not professional or have not acquired the necessary knowledge only proves that you are a big fool. This article will tell you why it is necessary for you to become a defensive trader. Though it may seem like you are giving the risks chances to destroy you, it is not. It is actually a strategy that few people can understand. This article will explain why playing defensive is better than playing offensive to build up your career in Forex.
Conservative approach
Do you know the conservative traders in the United Kingdom are doing relatively well in the Forex trading industry? Being an aggressive trader, you might have some big winners at the initial stage but in the long run, you will have to lose a significant portion of your investment. Always remember, trade management skills is the important ingredient to save your investment. Some of you might be thinking scalping is the perfect way to make tons of money, in reality, this is nothing but risking a huge amount of money.
Focus on price action signal
You have to understand the price action signal very well. It will help you to make more even during the high level of market volatility. But never start trading with your real money rather use the demo trading account offered by Saxo. They have one of the best trading platforms in the retail Forex trading industry. Try different trading strategy and trade the key levels with précised risk management. Stop thinking about the outcome of each trade, focus on your strategy. Keep track of your past trade so that you can learn from your mistakes. Always believe in proper trading strategy as it will help you to become a successful trader in the long run.
You blow out your money by playing offensive
The problem with offensive traders is they blow out their money. They think of their capitals something wastage and they try to increase the stake in every trade. As they keep on increasing but they have no knowledge, it is only waiting for time to take away their money. If you have seen the football match, you must have seen where players started attacking the other team to score a goal. It is the offensive playing when they choose to use this strategy. All their players jump on the front and they keep on attacking. If the opposite team get any chance, they will surely score a goal because there are no players to defend their goalpost. When traders are offensive, they put everything in the trade. This is something you always need to avoid to keep your career going.
You avoid unnecessary risks
The defensive traders do not take any unnecessary risk. It is a very positive quality that you need to build upon within yourself in order to sustain in this industry. The market is going to lure you with offers and attractive prizes. If you fall for the offers, you are going to lose track of your goal. Set your mindset focused on the ultimate aim and go for it. Only the defensive traders can achieve it as they have the patience and willingness.
It focuses on saving your capital
An important feature of trading defensively is it focuses on saving your capital rather than putting it on the market. It is a must have quality for all traders. The investment is the most important thing you need to concentrate. If you lose it, you cannot continue trading and the account will be closed automatically. The masters know this secret and that is why they always choose to go with the trend.