Every Singapore trader who ever traded Forex or any other financial market knows that feeling of panic when the market goes against your trade and you are losing money. Unfortunately it is impossible to avoid losses and even professional traders loose, the point is to loose less and gain more.
Let’s look at few simple trading methods that will help you limit your losses and increase your profits:
1. Stop-loss order. It is established upon the opening of a trading position to control the losses. A stop order is usually set up at the level of support if you open a buy position or at the level of resistance for a sale trading position. Such strategy of using the stop loss order will help you effectively control your losses in case if the market changes its direction and goes against your trade.
2. Trading without stop-loss orders. In this case, you keep an open position without a stop-loss order. Using this strategy, a Forex trader must possess an outstanding patience, and even accept the fact that due to the highly activity of the market you may end up on the wrong side. Instead you get a long time scale fluctuations of the currency pairs in the dominant direction of the trend movement. Be careful with this method, as it is very risky and you have to keep your eye on your trade all the time if it runs without a stop-loss order. This strategy is mostly used by the experienced traders. Beginners are recommended to trade with a stop-loss order in every trading position.
3. Hedging positions. This risk management strategy can be described as “the simultaneous buying and selling.” Most of the Forex Singapore brokers provide an opportunity to open two trading positions in different directions for the same currency pair. According to this strategy, once the market goes one direction you close the position to the opposite direction and continue trading with the trend. This method is great to use when the market is not certain.