If you are a newbie in the trading world, it is a given that you will do some research to find out some tips that can be helpful. There are a wide array of tips that you will come across; some will be about stock trading, others will guide you about risk management and you may also find those focusing on developing your trade strategy. While these tips can be quite useful, traders would prefer to save their time by checking out some smart trading tips that cover almost every aspect of trading. What are they? Let’s take a look:
Tip 1: Never jump in without a plan
This is perhaps the most important of all kinds of tips that you will on trading. You should never put your actual money on the line unless you have a proper plan of action. This means knowing how much you want to trade, when you will trade it and what you will buy and sell. If you go in without a plan, you are just heading for slaughter because things will not end well.
Tip 2: Manage your risks
Developing a risk management strategy is something every trader needs to do. Doing so ensures that you will only lose what you can actually afford to lose. If you don’t have such a strategy in place, your investment will go up in smoke and your journey as a trader will come to an end.
Tip 3: Take advantage of technology
As there are hundreds of thousands of traders out there in different parts of the globe, you need to take advantage of the resources at your disposal to keep ahead. Technology can be your greatest asset as there are charting platforms that can come in handy for analyzing the market. Traders can also backtest their strategy against historical data to get an idea of how it will perform. You can also get instant market access from anywhere and anytime thanks to mobile apps. Combine all of these technologies with a super-fast internet connection and you can make informed, fast and accurate decisions.
Tip 4: Never put a stop to learning
You need to remember that a successful trader will never rest because they are always looking to trade smarter. This means you have to stay up to date with the news, make use of trading books and videos and stay tuned to any emerging trends, patterns and strategies. Markets tend to evolve regularly and traders have to keep up or else they will fail. Most online brokers make it easy for traders, no matter what their experience, to do exactly this. You can read 10-Capital review online and check out the educational resources it provides to help traders in extending their knowledge and skills.
Tip 5: Go with the facts
It doesn’t matter what strategy you have chosen to trade. The key is to ensure that your selected strategy is supported by and based on facts. Since you are human, it is natural for you to be emotional, particularly if you have had a big win. But, this is just a trap and one you need to avoid if you wish to enjoy long term success. Always rely on facts and figures when you have to make important decisions about your trading.
Tip 6: Establish entry and exit rules
If you are looking for the ideal entry and exit from the market, your search will be never ending because it simply doesn’t exist. Instead, you need to consider your plan when you are choosing entry and exit parameters. Sure, you will be tempted to try something over and over again to see if it just might work, but this would be a mistake. Rather than doing so, it is better for you to maintain your discipline and the outcome will definitely be in your favor.
Tip 7: Don’t just focus on the money
This may come off as counterintuitive. After all, you have entered the trading world because you want to make money. However, it is important to understand that if you have money at the forefront of your mind, you will be tempted to do reckless things, such as opting to take small profits in fear of losing what you have already earned or jumping into the deep end so you don’t miss out on anything. It is better to concentrate on your strategy and let your strategy concentrate on making you money.
Tip 8: Act responsibly
There are plenty of traders out there who tend to blame the market or other factors when they lose a trade. If you will not accept responsibility of your actions, you will not be able to learn from your mistakes. No matter what happens, you need to look at things in a constructive manner. Figure out where you went wrong, how to stop it from happening again and if you need any amendments.
Tip 9: Keep a journal handy
It can be undoubtedly invaluable for you to maintain a journal of your previous trades. It has now become immensely easy for traders to keep track of all their trades with the help of software. You can store all relevant information, such as volume, price and entry and exit points. The information can be used for identifying any problems, making amendments to strategies in order to make smart decisions in the future. This is one thing that you will never regret.
Tip 10: Learn when to stop
Last, but definitely not the least, every trader needs to know when it is time to stop. If a strategy is not working, it is better not to throw your money at it. It is best to go back to square one and come up with a new strategy. If you don’t think you can stick to your plan, you shouldn’t sit on the hot seat because it is a dangerous and slippery slope and you will not see any money.