Drawdown and Leverages Intraday Trading
Opt for Lower Leverages to Avoid Huge Drawdown in Intraday Trading Strategy
Are you having a Huge Drawdown in Trading?
Learn to manage your account with right Leverages and try to avoid huge drawdown in trading. Manage your account properly with the right money management techniques, stop loss strategy, and not have the right entry and exit strategy, you need to acquire trading skills that make you a winner.
Learn that skill that makes you succeed and master as a trader.
Learn to control losses, but before that learn to control your emotions, The
hardest part in intraday trading is controlling a huge drawdown in any market
whether it is Commodities, futures, or stocks, or forex trading.
How to Prevent Recurring Trading Losses and Drawdown?
Place a stop-loss,
Do not move or change your stop-loss order stick to it.
control your emotions before placing a trade know what your
stop loss will be for that particular trade.
Do not place the stop-loss order too far or too close.
stop-loss order.
Keep tight stop loss at Predetermined Levels
In order to prevent a huge drawdown and wiping out your capital,
utmost care should be taken to see that you control your losses to the minimum
possible extent by keeping the tight stop loss at predetermined levels.
Before placing an order calculate the loss you can bear in that
particular trade and place the stop-loss order which should neither be too far
nor too close to hit the stop with market volatility or noise and when you are
overconfident of your trade and avoid stop that is when the market teaches us a
very hard lesson which will definitely lead to a huge drawdown when the trade
goes wrong.
Opt for Lower Leverages
There are different margin leverages allowed by different brokers
like 1:100, 1:200, 1:400, 1:500, etc. For easy understanding let us take an
example of gold trading with a fund of $500.
In order to trade a 0.01 lot size with 1:100, you require $ 18, $ 9 for 1:200, $ 4.5 for 1:400, $ 3.6 for 1:500 and so on.( Assuming the gold is trading at $ 1800)
To understand easily let us compare 1:200 and 1:400 margins
leverages.
In 1:200 if you spend $90 you get 0.10 lots ( 10 lots
of 0.01 size)
In 1:400 if you spend $90 you get 0.20 lots (20 lots of 0.01 size) so it is cheaper and one is tempted to buy more lots to gain more profits, but what if it turns out into a big drawdown?. One should always think about the loss and not about the profits because the profits can take care of itself but the losses are to be taken care of by the trader and prevent it in order to avoid huge drawdowns in the capital to be in the business of trading and save capital for another trading day.
Since the broker is giving higher leverage the new traders take more positions thus wiping their accounts in a short period of time. Let us learn some basics of how to keep your account running.
trader-qualities
first-15-minutes
gold-trading-strategy
drawdown-and-leverages
opening-hour-behavior
advice-from-successful-traders
know-your-trading
consistent-intraday-trading-strategy
last-hour-strategy
money-management-tips
entry-exit-time
common-repetitive-mistakes
trade-techniques
pick-right-stocks
stop-loss-placing
50-trading-rules-2021
wma-chart-setup
strong-mind-control
suggestions-for-new-traders
intraday-trades