What are the secrets of successful trading? There is not a quick fix, no fool-proof plan, no single strategy that allows making a profit every time, any time. That said, there are a few tips that could make trading easier.
- Use a trading plan
It’s always a good idea to have a clear plan whatever you do. Trading is no exception. Thinking ahead about criteria for entry or exit, a time frame for trading, what is your risk tolerance, what are the acceptable risk/reward ratios and profit targets, and other parameters will make for a smoother experience and results that are more consistent.
To find out more about trading plans visit our Education section, or consult with our experts.
- Persistence is the key
Treating trading as a hobby or something silly you use to spend your time on or set aside when you’re bored or something goes wrong is not a winner-making attitude. For one, if you want your trading plan to give you results, you have to follow through, every time. Take things seriously; make an effort. Poor work ethic, in this case, could be very harmful.
- Technology is your friend
Trading is a very promising and accessible field. You won’t be in a want of competition. This is why you should at least consider using everything that gives you an edge on other traders. The CapitalXP mobile app allows you to receive real-time market news, charts, market analyses, and other trading tools wherever you go. It’s useful to have ability open and close traders on the move – no chance of losing your perfect opportunity!
- Manage risks
Bigger the risk, bigger the reward is not always true. In fact, with trading, it almost never is so. That’s why there are so many existent risk management techniques. That’s why stop-losses and take-profit are a thing. Protect your capital. Even if things look good enough for now, it could take only one unfortunate incident to make you re-do all the progress you made on your trading capital.
- Communicate with more experienced traders
Trading is a solitary affair. You need little more than your computer or your smartphone with an Internet connection to do it. It’s not an office job. Because of that, you won’t have a mentor or a colleague to exchange opinions and experiences. And no one can learn everything by himself. Seek out people to obtain the benefits of shared knowledge. CapitalXP makes it easier to communicate with more knowledgeable traders thanks to webinars and live trading with experts.
There are so many attractive markets it is not possible to keep track of them all. So don’t try everything at once. Choose something you are interested in the most and invest time and energy in that field. Don’t scatter your attention. It would be hard to make the right choice in trading when there’s too much to choose from. If you truly believe you can’t get anything useful out of the market anymore look elsewhere. Just not everywhere at once.
- Stay focused
Traders are under a great deal of stress usually. It is in the business’s nature. Circumstances change too quickly. Risks could be hard to deal with. Most of all, there are and will be still losses. You must accept it so when it happens, you’re not out of your game. Acknowledge loss and move on.
- Never risk more than you can afford to lose.
Things were said about proper risk management and acceptance of losses, but the most important thing is you should never use the money you can’t afford to lose (such as a mortgage or college tuition) to fund your trading account. You can’t be prepared to lose if you can’t afford to fail. The anxiety of a possible loss will make you a worse trader.
- Keep the big picture in mind
We talked about losses at length. Now, it’s time to mention winnings. The same principle applies here. Have realistic expectations about your winnings and don’t let them distract you from your trading plan.
- Schedule is important
Developing a routine for your everyday trading activities is useful. You should choose your trading hours. When it would be most efficient for you to participate in a trade? Put it down in your trading plan. Set aside time to check news and market reviews and industry reports. And no overtime. The trick for trading is not ‘work harder’ but ‘work smarter’. You need to be in top shape if you make decisions that might cost you money.
No rule in trading is set in stone. However, those 10 tips, if followed, would make it easier to achieve your set goals successfully.