Many people prefer to trade in foreign currencies with the foreign exchange in the (forex) market, and it requires less amount to start trading easily. However, Forex broker provides leverage that helps in Forex trading and is available 24 hours a day, seven days a week, and provides a lot of profit.

In this article, the following techniques show the possibilities of any kind of risk and will highly assist you in avoiding risky and scam-based trading. So, let’s get started;

Risk Management in Forex Day Trading

Risk management is one of the most important parts of long-term profitability for any successful FX day trader. When you start trading, you should keep your limit minimum in each trade which will help you to prevent the risk of high loss. When you maintain your limit, which is usually 1 percent or less, which means if you have $3,000 in your account, you will only lose $30 on a single trade that is not a high loss.

Strategy on Trading Forex Day

If you want to trade successfully, it is really important to make a strategy that can potentially and also have multiple components. However, it has also analyzed profitability in various ways. This strategy will be based on its reward and risk ratio and help you to rank it.

Winning Percentage

The number of transactions you win out of a total number represents your win rate. If you win 55 of every 100 trades, your win rate is 55 percent. A win rate of more than 50% is preferable for most day traders, and 55 percent is achievable.

Risk And Reward

Risk and reward depend on how much money is put at risk to make a profit. When a trader loses ten pips on unsuccessful trade while makes 15 pips on winning deals, he or she is profiting from the winners more than the losers.

That means the trader will be profitable even if she only wins half of her trades. As a result, if you want to gain more money on successfully trading which is a strategic goal for many forex day traders.

A higher success rate for trades allows you to be more flexible with your risk/reward, while a high risk/reward ratio allows you to have a lower win rate while still being profitable.

Final Words

In this article, we have discussed with you is forex trading profitable or not? Moreover, we share the basic risk-controlled technique suggesting that FX day trading can yield more than 20% monthly returns. Most traders should not anticipate making so much money; while it may seem simple, it is more challenging. However, due to leverage, a dedicated FX day trader with a good technique can easily make 5% to 15% per month with a good win rate and risk/reward ratio. Remember that you don’t need a lot of money to start trading; $500 to $1,000 is enough to start forex trading.