How Trade Management and Stop Losses can Boost Profits?

Trade management is undoubtedly among the most vital factors of profitable trading practices. Most successful participants of online trading in Nepal use logical evaluation to enter the market and have a sound plan that they follow. While most strategies would need the basics of trade management, there are different aspects that one would need to incorporate into his trading system to maximize chances of profit. 

Stop loss

One of the most important elements of management in a trading strategy would be locating a stop loss. Stop losses are meant to be positioned before one enters the transaction, for they could determine the outcome of a trade. This is a critical part of the entire procedure and one would need to position his stop loss within the right range of pips to avail the right outcome. Most novices would place stop loss by just a few pips’ distance in the hope of seeing the price values move in their favored direction. However, this needs to be avoided and a more accurate method of placing the stop loss needs to be implemented for ensuring minimal losses. 

Trading sessions and their impact

Within a single 24 hour day, the online trading market transitions through three separate trading sessions. One needs to be aware of the impact that each of these sessions has on his transactions. Knowing when a new session is about to be initiated is important, especially for someone trading in the London session. 

When you carry transactions over from one session to another, then the alternations of the coming sessions are sure to impact your trade. To guard from this, you can either terminate your trade before heading into the next session, or position the stop loss in an appropriate manner prior to the arrival of the coming session. 

Risk and reward ratios in trade management

Someone unable to make profits would need to re-evaluate his risk and reward ratio. Implementing the right risk/reward ratio helps to optimize chances of success and regulate the risks involved with a particular transaction. A general rule that traders apply is setting a risk to reward ratio of 2:1. This enables them to win more than thirty percent of the time without having their account’s value diminished. 

Conclusion

These are some time-tested techniques any trader can use to enhance his overall trading performance. If you need more help in this regard, then get in touch with leading Forex brokers in Nepal. WesternFX is a leading international brokerage with our headquarters in North America and clients around the world. Team up with is to deepen your understanding of this field and lift profits!