Improving your profit factors in the Forex market
Improving the profit factors in the Forex market is a very challenging task. The traders are always trying to earn more money but they don’t know the perfect way to improve their win rate. They are trying to trade the market with a big lot so that they can secure a big profit from the winners. Having the advantage of leverage, the rookie traders often forget the importance of money management. They take too much risk and lose a major portion of their investment. You don’t have to increase the volume of a lot to earn more money. Read this article and start improving the profit factors in trading.
Try to win more trades
You don’t have to win big trades to earn more money. You need to reduce the losing orders and focus on winning more trades. You might have thought taking more than 4% risk in any trade is not a big issue. But have you ever consider your win rate. A system generating profit 70% of the time, can change your life. Let’s say, you have a 70% win rate. So, if you increase the risk in each trade by 4% and lose 10 consecutive traders, you are going to be in big trouble. Stop increasing the lot size and try to win more trades to boost the profit factors. Stop acting like a naïve trader and focus on math.
Start copying signals
Have you ever heard of the copy trading service? The professional traders at Rakuten often use mt4 copy trading service to follow the experienced traders. By doing so they create an alternative source of income. But if you intend to take advantage of the copy trading service, you must maintain two different accounts. In one account, you will be trading the market using your unique trading strategy. And the second account will be linked to the pro traders’ account. All the trades executed by the pro traders will be copied to your account. Thus you can easily create an alternative source of income by using the copy trade service. And this process can greatly improve the profit factors.
Start relying on the price action signals
Do you know the price action trading strategy is mostly used by the highly skilled traders? It allows the skilled trader to execute high-quality trades without having any problem. In fact, by using the candlestick patterns, you can execute trades with a very tight stop. When you start using the tight stops, it will help you to increase the lot size without taking too much risk. Trading is more like managing the risk in the most efficient way. So far, the price action trading strategy tends to work best when it comes to the use of the conservative trading method.
Start trading the news
You should learn to trade the major news since it can help you to earn more money. Trading the major news and executing random trades in the Forex market is a very big challenge. Some of you might not feel comfortable with the news trading method but this is very easy. You have to analyze the news data and wait for the perfect price action signals. Does that mean you have to rely on technical data to trade the major news? The obvious answer is YES. Unless you learn to analyze the technical and news data at the same instant, you can’t trade the major news and make a big profit.
Trade with the trend
To trade with the trend, you need to learn about the stages of the trend. Unless you know to find the endpoint of the retracement, it’s very hard to find the perfect entry point. The naïve traders don’t want to learn about the major retracement and end up placing trades against the major trend. If you want to win more trades, you must learn the trend trading strategy. It might seem tough but you can always practice in the demo account to develop your skills.