Never put all your eggs in one basket
You may hear the story where one little boy used to put all his eggs in one basket. He used to rise early and went to sell his eggs to the market. One day he put all of his eggs in one basket and when the basket fell on the ground, the boy lost all of his eggs. This is a way of teaching children that you should not put all of your important things in one place.
Accidents can happen anytime and you do not want to lose your money for that. If you think you are going to trade the market for making money in Forex, you cannot take all the risk in one trade. It may sound abnormal to you but there are lots of traders who take big risks in their one trade. They are not using leverage and if they lost this trade, they are going to lose all of their money in Forex. These are the traders that put all of their eggs in the one basket. This article will tell you why you need to take different risks in your different trades. If you try to carry all of your eggs to the market at once, you may slip on the way and break your eggs. Carry them in different baskets and you will be successful selling them on the market.
Every successful trader in the United Kingdom strongly follows the moral of the story in currency spread betting. They know very well about the probability factors in the trading industry. Unlike the expert traders, the novice traders are always risking a big portion of their trading capital in every single trade and losing their trading capital. You need to learn the proper way to trade this market. If you don’t educate yourself with the advance knowledge of money management, this industry is going to make your financial condition much worse. Simply follow the moral of the story and risk a small portion of your trading capital in each trade.
Take risks in various trades
We know that traders have got the chance of using leverage in their account. It is a blessing for many traders and they use leverage to maximize their profit factors. They do not understand they are taking big risks and in currency spread betting you can’t become a profitable trader without reducing your risk exposure. If you are going to take risks in Forex, never take huge risks in only one trade. If you are trading with £100 in your account and see a good trade setup on the market, do not put all of your money in that trade. You can take at most £5 risks in your account but no more. Remember what the little boy did with his eggs and this might be a lesson in your career. You need to understand the fact the outcome of each trade is totally random in nature. You don’t know which trade will hit your potential stop loss or take profit level. So always make sure that you are not risking too much even though you have the best trade setup.
Trade with different strategy if you lose
It is very natural that you will lose your money in currency spread betting. Do not think it is only happening to you since the expert traders in the UK often have to face a series of losing trades. You will find that a lot of people are trading with different strategies every time they place the trade on market. This way you will know which strategy is best for your market and which strategy you can understand better in your trades. If you are completely new to this industry, use the demo account to master the art of trading. Once you feel confident with your demo trading performance, switch back to your live trading account.