Most of us look at trading as a fast money making option. Some people jump into the trading process to make fast money without any experience or knowledge of it. You will hardly find a trader who never faced losses. In trading there are common phrases “Plan your trade; trade your plan” and “keep your losses to a minimum”.
You may possibly have heard successful trader stories about how they changed their life with successful trading. Someone like Bill Lipschutz who started his journey with 12000 dollars and doubled the number in the stock market after a few months. He then moved to forex trade and made over 300 million dollars with successful trading.
There are many more such success stories in the trading industry., What makes a trader become successful? If you are a beginner, then you must be wondering how to crack that million-dollar question. Truthfully, there are no secret tips to make you rich overnight. But, if you follow some of the proven rules, then there is a high possibility of getting success.
1. Set a Strategy
Not all marketers follow the same strategy to achieve success. You can set a strategy based on trade lines, fundamentals, or moving averages. Also, people set their plans based on risk tolerance levels. But, you must have an idea about which plan is more suitable for you.
As a beginner, it is often difficult to find the right track without any proper guidance. People sometimes resort to social media like Facebook, Youtube or other platforms to get their guidance and advice. It would be much safer to follow expert advice who guides you in every step according to your needs.
The Traders Podcast with Rob Booker Reviews is one of the best platforms to start your journey. He clarifies your trading strategy with all important information related to business. To know more about his bio you can check his Linkedin profile here https://www.linkedin.com/in/rob-booker-b34ab124.
2. Check The Price Charts
Once you are clear about your strategy, it is time to check the price charts. Make sure, you give a close look at the price charts to find the best entry and exit points. You can try free charting software like TrendSpider for better chart reading skills.
It does not matter whether you are an expert or a beginner, you must analyze the long term charts. Long term charts like weekly or monthly charts reveal the market tread. For every investor, it is important to track the recent market trend. You don’t really want to risk your capital based on strategies alone.
3. Capital Management
As we said earlier, there is no single marketer who never faced losses in trading. So, exactly how much capital should you risk in trading. Experts say the safest limit is to contain 2% of your account balance. Besides, you can go up to 15% of the total amount of all your trades.
On another note, you have to understand the basic principle of primary capital and its associated risks. If you are short in capital then it would be difficult to cover your losses. On the other hand, large capitals with proper strategy have quick chances to recover losses.
To get a real picture, let’s say you started trading with 100 dollars. Now, if you fail a 20 dollar trade, that means you are losing 20% of the capital. What if, the primary capital was 1000 dollars and you still lose a 20 dollar trade. That is only a 2% loss of your capital. That is easier to recover than the first one.
4. Understand The Market
As a marketer you must keep learning about market trends. What are the issues that have a direct influence on the trade market? These can be politics, weather, sports events, pandemics, or any big deals between superpowers. Almost all marketplaces are dynamic, they change depending on some stimulus.
For better market trend understanding, all big marketers analyze the past and present market trends. As an investor, you can not sit idle after investments. You must read newspapers daily and go through all the economic reports to have a more clear understanding of the market forecast.
5. Control Your Emotions
Emotions can be a big barrier to your success. As a trader, you have to control your emotions for successful trading. For a profitable trader, you have to seperate (or at least balance) love, family, lifestyle, spirituality to achieve your goal. A negative impulse can blow up your plan in no time. So, check your emotions to become a successful trader.
6. Do Not Dig Hard
As a trader, you need to understand the market flow with all possible stimuli. For a beginner, you can start slow and practice on a demo account. Do not dig hard without understanding the underlying facts. Being too flashy can stick your trading at a very early stage. Make sure you get into the flow and maintain a rhythm to grow as a successful trader.
7. If you Sense It Wrong, Get Out
It is impossible to find everything right in all your trading. Even the market leaders can not pinpoint everything with 100% accuracy. So, when you find you are doing it wrong, get out as quickly as you can. That is one simple formula that all successful marketers believe. If you hang more, that can even worsen the situation.
8. Risk What You Can Afford To Lose
Do not trade with money to pay loans, mortgage, tuition fees or utility bills. Some people borrow money to become a trader. This is an extremely risky move. As, mentioned earlier, there are no secret tips to make you succeed completely. In trading, you must have to risk some of your capital. So, trade with the amount that you can risk losing.
9. Understand When To Stop Trading
All smart traders understand when to stop trading to save capital. You have to stop trading because of failure in the plan or your self ineffectiveness. After all the analysis, if you find your plan is not working and you are finding yourself in a consistent loss then you better stop trading. Try to find why the plan is not working. If possible try to consult an expert.
Self ineffectiveness can also be another reason to stop trading. You may fall sick or there could be personal distress to stop trading for a while. Take a break, resolve the issue and then come back strong into the flow. It is better not to risk capitals, when you are inactive.
Successful trading comes with experience and planning. If you follow the above-listed rules, then you can be a successful trader in no time. Success always comes with patience and hard work. Keep trying, today or tomorrow, you will surely succeed.