Trading is often considered as the most dangerous investment business in the world. Based on a recent study, it is safe to assume more than 95% of the retail traders are losing money at trading. So, it’s very obvious, it requires special skills to survive in the investment industry. In fact, trading is harder than traditional business since you need to deal with mental stress on a regular basis. However, if you manage to tame your subconscious mind, you won’t have to become a part of the loser’s community in this investment business. Always think outside of the box and only then you will be able to make a consistent profit. Stop thinking about the losers and contrite to find a way to reach your goal.
Due to the advancement in technology, people now have access to the online brokerage firm by which they can sell or buy the financial instrument. Easy access and high leverage trading account have made things really hard for the traders. To become a successful trader, you must learn to accept the losses. And for that, you need to learn to lower down the size of the losing trades. But controlling the emotions is really hard for the naïve traders. However, you don’t have to worry since we are going to give you some amazing tips by which you can use the EAs to reduce the risk of trading.
Determine your max lot size
The advanced coders can easily create your risk management bots that can be very useful for aggressive traders. Instead of purchasing the traditional EAs, you can purchase risk lot size determiner bots that can put great restrictions on your trade execution process. Based on the size of your account balance, the EAs or trading bot will put an upper threshold for the maximum lot size.
Even if you intend to take a higher risk, you won’t be able to do so. In fact, some of the EAs can even lock you out from the trading station for a few hours. And these hours are very crucial since your mind will calm down and you won’t take any aggressive steps.
Frequency of trade execution
The majority of the traders are losing money since they are overtrading. They think overtrading is the only way by which they can earn millions of dollars. But in reality, overtrading is one of the key reasons for which the naïve traders are blowing up the trading account. If you want to succeed at trading make sure you are not focusing on the number of trades you execute per day. Quality should come first since it is the first rule of investment business.
It’s better to stay in the sideline rather than losing money on low-quality trades. Design a unique EA which will limit the number of trades you can open in a day. In fact, you can also determine the maximum number of trades that you can for a particular trading session. So, just by using a smart EA, you can solve the problem of overtrading.
Stop trading against the trend
You need to think smart when you start relying on the EAs. The smart coders have now the unique ability to design trading bots that can find the direction of the trend with a high level of accuracy. The majority of the naïve traders are placing trades against the major trend and losing tons of money. But imagine having an EA installed that only allows you to trade in favor of the trend.
You don’t have to analyze the direction of the market movement since the trading bots will do all the hard work. Basically, you will get a unique chance to trade in favor of the trend without even knowing much about the major trend. And once you start trading with the major trend, you will be amazed at your success rate at trading.
Automate your risk management process
At times the traders become frustrated after losing a few trades and they hold on to the losing position with great hope. Things might go in their favor but this is not a good decision from the investor’s point of view. You need to cut down the losing trades as soon as you understand the trade has gone wrong.
Those who are emotionally attached to this mark can use risk management EA that will atomically close the trade when the loss exceeds a certain percentage of your account balance. It will work more like the margin call. Though it can be annoying, in the long run, it will save a huge amount of money. And at trading managing, the risk exposure is the most critical task. Since forex robots and EAs have no emotional attachment to this business, they can perform this task with a great level of precision.