If you are a beginner, you probably want to learn more about becoming a successful trader. Trading is a kind of business which gives you more freedom. Yes, freedom is a good thing, but it has to be structured. If you decide to trade without setting rules, then you are far from being successful. What does freedom actually means? It means that trading can be done wherever and whenever you want, but it should be done with rules. Rules give consistency to your trading venture. These rules will keep you alive. However, most people do not make their own rules because they hate to take responsibility for their results. Since the trading system is volatile in nature, it is important to get access to different global trading tips to fast track your education and to unlock your goals of earning better.
Rule #1: Desire and Drive
You need a core desire for success to carry those challenging periods and give you the courage to make sacrifices. To generate higher levels of desire, think about the reason why you wanted to get into trading. More time with family and overseas holiday lower the golf handicap, only you know your answer! Just remember, obstacles are what you see when you lose sight of your goal!
Rule #2: Create a Plan
Before you start trading, understand that there is no Holy Grail. Too many will divert from the path they began. These people usually search for an easier option and end up as what you might call – a Jack of all and master of none. More often than not, this does not work in the trading market. What you need to do is create a plan designed for trading. A trading plan is a set of rules specifying the entry and exit, as well as the money management aspect of a trader.
While planning is a time-consuming endeavor, the technology today has helped people obtain ideas before risking money. To determine if your plan is viable, you should do backtesting by applying ideas to the historical data. If it shows good results, it can be used in the trading. Understanding your rules and knowing when and when not to will hold you in good stead.
Rule #3: Stick to Your Schedule
You are the only person that can determine your schedule. Trading is all about closing out positions. You are a trader and not an investor. If you see profits, you take it and then look for the next trade. If you are running losses, book them and live for another day. In trading, there is always a next day. Do not close out loss-making trades the next day if you have a longer time span. If you have studied the trade properly, money will come at the right time.
Rule #4: Do Trading as a Business
If you treat trading as a business, you will see it not just a simple job or a hobby. If you treat it as a hobby, the commitment is not that strong because you will trade only when you are available. If you treat it as a job, it can be frustrating because there will be no regular salary. Trading is a business because it incurs losses, expenses, taxes, stress, risk, and uncertainties.
Rule #5: Make Use of Technology
Traders today make use of software and technology. The world of technology concerning trading has been around for awhile. In fact, it keeps getting better. High-speed internet connection, faster computer processors, and software have helped traders. Technologies designed for innovative market research tools, the ability to test trading accurately on historical data, and trade automation are more powerful tools. The trading app makes it possible to enter orders, trading setups, and management positions. Using outdated technology will put you at a severe disadvantage.
Rule #6: Do Not Compete with Other Traders
Different merchants use different methodologies. This explains why the results are different. A portion of these traders is eager to risk 3% for a 10% monthly profit. Others are ready to take 25% risk and aim to double their earnings every month. It requires time and effort for the traders to find out their style of trading. Instead of competing, think about your style.
Rule #7: Do Not Risk If You Can’t Afford to Lose
Losing is a part of trading. If you are not in a position to incur losses, psychologically or monetarily, you have no place in trading. Before traders use real cash, all of the money should be expendable. If not, the trader should save more until it is. The money used in a trading should not be used for tuition, mortgage, or bills. You should not think they are “borrowing” money from other obligations. You must be prepared to lose all the money used to a trading account. It is traumatic that’s why do not risk more than you cannot afford to lose.
Rule #8: Don’t Trade If You’re Not Sure
Protecting capital and managing risk help the traders survive in the game. The rule of thumb is to risk not more than 2% on each trade. Most traders risk more on the belief that they could earn more. Unfortunately, this scheme will destroy their accounts. If you feel unsure of the trading style you are using, then implement a stop order. Placing stop order as part of your routine will keep you safe with your money management and gives you peace of mind. You should protect your earnings because if you continue, you will end up taking a loss.
Rule #9: Build Proper Strategies
New traders should build a realistic strategy. Even old traders should try new strategies to see if they work better. Analytical tools are one of the important techniques used to determine the trend. These methods must not be complicated you should use only three analytical tools to know the trend. Always keep your technical method easy. Complex systems raise confusion. When a market is well-built, purchase more. When a market is weak, sell additional.
Rule #10: Continuing Education
You should become a student seeking to learn more about the market. We have all heard those wisely spoken words of advice – if you want to be successful at something, be sure to take heed of the advice and actions of those that have already proven themselves in your desired area of expertise. Continuing education does not necessarily mean going to traditional schools. It just means doing comprehensive research and allow the traders to learn the facts of the economy.
Events, world politics, economics, and weather have an impact on the markets. The more you understand the current markets, the preparation you will be to face the future. Your ability to follow the golden rules is a reflection of how much money you will make with your trading. The more you follow them, the better you trade.