First of all, you need to remember an important thing: “never lose your profits.” It is a lot easier for you to see your trading points going up, but a reverse situation is very hard to digest. You must consider yourself a lucky person if you haven’t gone through this situation. Due to poor money management, a lot of traders face this situation regularly.
In the forex market, everything runs at a fast pace, and things can change in minutes, which make it difficult for you to manage your capital. One of the first and basic rules you need to remember is to always protect your profits. Managing your pips is very important here even if you are using a small 15 pips at one time. Some traders might say that using 15 pips is a chump change, but assuming you are trading 10 points with a total of 15 pips that would mean the total points of profit you will get are 150. Your main job should be to increase the profit by minimizing the risk.
The important thing is that since it’s your money so you must deal it your way but with caution. Like a soldier at first tries to protect him and makes his ground, similarly you must make sure that you are secure before proceeding.
Now I am going to tell you about two basic ways through which you will never turn a winner into a loser. Below are the details:
Trail your stops
This technique might require some work to be done, but it is indeed an important thing to lock your profits. Through this technique, you can set a near-term targets for your profit. For example, you marked near the target to 15 pips initially, and then as soon as your profit will reach near 15 pips, you will be able to stop and make your move towards the breakeven. It is even fine if it moves slower but stops where it is needed. If it continues to move up, you can shift your breakeven stop to further five pips.
The second technique through which you can increase your gains is to trade in more than one lot. Trading in more than one lot will allow you to set the two separate profit targets. You can place your initial target by taking conservative approach while in second target, you can go for an aggressive approach. Once you manage to achieve your first target, you can make the stop move for the next target.
The 15 pips target is just taken as an example you can set your own target based on your risk preferences. If you have funds in your banks and want to play a longer game, you can set the pip to 50 or even 100 points. However, for your first try keep it at a minimum level. Managing your capital is indeed an art that you will learn with time.