Dealing with market volatility is a very easy task. Most of the traders don’t know how to deal with the market volatility and they end up taking a high risk. Becoming aggressive when the market is extremely volatile or result in big losses. You might even blow up the trading account and there is nothing you can do about it. To become a successful trader and you must learn to focus on the core market details. The market might be stable or volatile, it doesn’t matter. As long as you trade with discipline and follow the proper strategy you will be able to depend on the trading business. In this article, we will teach you how to deal with market volatility like the pro-UK traders. Let’s dive into the details of this article.
Trade with a 1% risk
Novice traders are always trying to trade with high risk since they think it is the only way by which they can become a millionaire. It’s very normal to think about big profit since you get access to a high leverage trading account. But people forget that leverage is more like a double-edged sword and you must know how to use it. If you fail to handle the leverage in an effective manner, you will always find yourself losing a big sum of money. To address such complexities, you can lower down the risk to 1%. Once you start taking trades with 1% risk you will feel more comfortable and this will allow you to focus on the core strategy.
Keep the emotions in control
Learning to keep emotions in control should be your top priority. The elite traders at Saxo capital markets have zero emotional attachment. They can leave the trading station after losing 10 trades in a row. You have to become like them or else you will pursue the losses. This will because you lose more money and eventually you become frustrated. Have confidence in your trading system and never trade this market without having full control over your emotions.
Stopped reading the major news
To protect your capital from the intense volatility of the market, you have to stop trading the major news. New trading is only for the experienced trader who has years of skills. Being a new trader, you should know about the timing of the news and this should give you an idea when you should not take any trade. There is no reason to think that you are avoiding big profit potential by avoiding the news hours. It is the best possible way by which you can secure the capital. To develop a valid trading routine so that you don’t execute random trade without knowing the market condition. It might take you a while but you can easily do this by using the demo account.
Learn about price action signals
One of the easiest ways to deal with market volatility is to learn about the price action trading strategy. It is based on the Japanese candlestick pattern and it aids the investors to execute high-quality trade at the critical support and resistance level. When you use this technique, you must be careful about the risk exposure. If you increase the risk exposure no matter how hard you try, you won’t be able to make a profit with this system. As a professional price action trader, you should be focusing on the higher time frame only. If you intend to take trades in lower time, you will be losing most of the trades since the price feed are not that stable. Remember, the price action trading strategy is based on the Japanese candlestick pattern. So you must learn the anatomy of the candlestick pattern from scratch or else you won’t be able to execute the high-quality trades.