If you can trade with a fixed trade setup, it will help to trade efficiently. The idea is to be consistent with your trading approach. Not only the trading plans but also the frequency of trading needs to be consistent. In the case of trading frequency, you need to be less aggressive. It is not appropriate to trade too frequently otherwise, the percentage of losing trades will dominate over the winning one. It is not appropriate if you want to ensure the safety of your business. The idea of consistent trading approach come for the same reason. If you use a decent yet fixed trade setup and approach to the markets, you will be relieved from the complex management task. The plans may not work out every time but you have the scope to improvise too. Thus, you can establish an efficient trading plan to manage a suitable market condition to make profits.
To develop a proper trading plan or trade setup just like the pro trader. After that, develop the strategies to ensure risk management, market analysis, and position sizing. Give significant time to develop trading plans.
You will need proper risk management
The first thing which every trader need is a proper risk management plan. It helps to sort out the risk per trades. At the same time, you also get a chance to decide on the initial investment in the trading account. For example, if you think of following a proper 1% risk per trade strategy, it will require some influence from the account. Your need to manage the risk exposure efficiently so that, you do not use too much investment into the trades. Even after a demo trading startup, the traders need to plan for the trading capital. A $1,000 trading account will be proper for the novice traders. On the side of investing for a trade, the leverage system also needs some plan. In this case, you have to choose a proper idea which can ensure the increment of the investment as well as keep your account safe from the losing orders.
If you plan to use a 1:20 leverage, it is safe and follows both criteria. If required use the Forex trading demo account to understand how this leverage works in the investment industry.
Use the most valid profit targets
With risk management, the traders need to plan for the profit targets. It is more like a risk to reward ratio (RRR). If you can utilize the trading approaches according to a proper RRR, it will help a lot. A proper position sizing can be ensured from the RRR. You will know when to enter the market for a trade. It will also define a proper exit point. You will need to set on a decent risk to reward ratio like 1:2. It means that you will trade with 1R of risk and aim for a 2R profit. With this strategy, it is easy to find a proper market condition for the trades. On the other hand, you can also take care of the stop-loss and take-profit with proper market analysis. Following the profit target and analyzing the potential support and resistance zones, you can trade properly.
If you want to survive in the currency trading business, a decent profit target is necessary. Otherwise, you cannot cope up with the market volatility and win profits.
Spend significant time on analyzing
In the last segment, we have used the idea of technical analysis for stop-loss and take-profit. They mostly need support and resistance zones. For that, you can use the horizontal lines and decide on a proper setup. But there is more in the technical analysis. Think of the trend lines, oscillators, Fibonacci retracement, and important chart patterns, etc. on the other hand, the fundamental analysis must be done before the technical analysis. It helps to understand the market volatility using price driving catalysts. So, it is necessary to spend a sufficient amount of time for market analysis.