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Pro Tips to Protect Your Forex Trading Account Balance

Beginners find it hard to protect their Forex trading account balance, especially during the early days of trading. They still do not realize that they risk real money, which leads to significant capital damage. The ability to prevent your balance from blowing off right at once defines the difference between an amateur and a professional investor.


Being an accurate and skillful technical Forex trader makes no sense if you lose all your capital along the way. In this article, we will share professional tips for beginners who want to protect their Forex day trading account balance. But before we dive deep into details, we need to clarify several crucial questions.

Is Your Bankroll Durable Enough?

The first question we need to answer is how long your bankroll can survive. Improving Forex chart reading skills will eventually let you understand how the market moves. Things will start making sense after some time. On the other hand, all those skills will make no sense without a bankroll able to survive by the time you will master different Forex strategies.

Generally, beginners decide to go solo skydiving during the early days. Most of them jump out of the plane without enough experience, knowledge, and practice. They ignore the fact that prior training before the jump can save their lives. The same refers to the Forex trading account balance.

No Capital Means no Profit

Most beginners do not realize a simple fact. If they do not have capital, they can never make money. Of course, one can invest in penny stocks or trade with a small account. However, these techniques require much experience and real-market skills. They are not recommended for beginners.

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So, the second step is to consider your capital as admission to the financial market. It is the price for the entry ticket. If you do not have the ticket (running out of money), your investment journey is over. This fact leads us to major points you need to take into account as a part of your account balance protection strategy.

Tips to Prevent Your Forex Trading Account Balance from Blowing Off

It is very important to clearly realize your current financial situation. It means proper budget planning knowing exactly how much you can afford per trade. One needs to conduct a plan and stick to it instead of deviating on a whim like a gambler.

Additionally, account balance planning is not just about deciding how much you can spend on each trade. It is also about long-term planning. Traders must decide on a sum they can put in their account each month or year. The idea is to make your account balance reload methodical and well-organized. Capital planning requires discipline. Once you have worked out a monthly or annual plan, you must never exceed it. Another important thing is to avoid losses that can be to the detriment of your way of life.

Now, it is time we discussed some practical tips:

  1. Pick smaller positions from the start. Sometimes, beginners select lots with a bigger size. Even if you feel comfortable with bigger trade, think of reducing it by 50% or even 75%. Trading smaller positions during the early days will definitely protect your capital from blowing off. Do some math. Imagine 10 next trades you might lose. Where will you be in the end? Will your capital survive? If not, opt for lots of smaller sizes. Some experts recommend using wider stop losses. However, it does not matter if you trade with tight or wider stop losses. You can still lose the same amount. So, position size is yet the most critical factor.
  2. Use smarter Forex strategies. Trading smarter in general means using the best price action patterns and Forex charts you clearly understand and feel comfortable with. This fact will ensure successful Forex trading. The idea is to stick with them and master them in the long run. Professional investors always know their weak and strong sides.
  3. Do not let your subconscious fool you. It generally happens after a series of successful trades. Beginners do not know when to slow down and take a breath. The main mistake here is avoiding the fact that it is not going to be that easy all the time. Overexposing can lead to devastating failures. The key to success here is to get prepared for a loss and accept it as a natural and inevitable phase of trading. On the other hand, overthinking and over-analyzing each trade will do no good. Whatever happens, always stick to your initial Forex trading plan along with its pre-defined parameters.
  4. Select trades with safe risk rewards. If you want to trade like a real pro, you need to learn how to pick trades with a sound risk-reward ratio. Normally, investors opt for trades that offer risk-reward starting from 1 to 1.5 or 1 to 2. Do not select traders that offer a lower risk-reward ratio. Some choose 1:1 lots or less. This makes it impossible for them to win or build a bankroll in the long-term perspective.

The Bottom Line

Those who seek long-term trading success and stability generally apply tools to preserve their capital. The majority of beginners end up with their balance blown away. Some lose even more than they can afford, which leads to horrible consequences not only for their trading career but their daily lifestyle.

Additionally, those who lost in the early days think trading is too hard. A simple key to success is to know how much money you can afford to lose. This knowledge involves both financial and mental aspects. How much can you mentally lose and put up with it to move on? This is the question amateurs have to answer in order to conduct an ultimate capital preservation plan.

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.