Trader: 8 tips for good stock trading
To become a successful trader, make a trading plan and stick to it A trading plan allows you to know how to act in each situation because you will have thought about it before. There is nothing worse than making a decision in the heat of the moment. Would a businessman have the idea of starting a business without establishing a business plan first? However, if don't have time to monitor your market, we do the trades for you, you sit back and enjoy!
To become a good trader, apply the rules of money management Some newbies are not shocked by putting 15 or 20% of the capital at risk on a trade. The main rule of money management is simple. You should never risk more than 1 or 2% of your account on a transaction.
Many traders still take positions of a fixed amount. This is a big mistake. You have to commit a sum of money in trading according to the market and your capital, not according to your desires.
To become a good trader, avoid spreading yourself too thin Diversification is a good thing when you are an investor.
But a beginner in trading has an interest in following only one strategy at the beginning with a very limited investment universe: not to seek to trade at the same time in the stock market, in the currency market and in the commodity market. Also avoid investing in a multitude of stocks or currency pairs, for example.
To become a good trader, be careful with leverage Leverage is indeed a double-edged sword.
You will always be very tempted to take big positions to make a lot of money, but will you be really careful when using your leverage? Usually no. You will often tend to think only of gains when taking a position. Remember that if you can make for example $8,000 by taking a position in the market, you could just as quickly see them go up in smoke.
To become a good trader, know how to cut losses
Before you can win, learn not to lose.
It is essential to always protect your capital with a so-called “stop-loss” order. A biker must use a helmet to protect his life, you must also use a stop loss to protect your capital.
To become a good trader, keep your cool Be patient to look for the right opportunity and to be able to wait until market conditions are favorable to the applied strategy.
You shouldn't let your emotions take over and give in to the trader's stress , but you shouldn't ignore them either. Knowing how to manage your emotions is one of the keys to success for a trader.
To become a successful trader, trade with money you don't need immediately Whenever possible, you should trade with money that you don't need for a living. On the one hand, because it is not excluded that you may lose it and, on the other hand, because by trading with the money that you need to live, you will not be able to properly manage your emotions and they will necessarily take precedence over your rational reasoning.
To become a successful trader, spend time learning Trading, a profession in its own right, is like all professions in the world: it must first of all be learned. It is not enough to open a trading account and read a few daily analyzes.
You have to be trained and informed using the many specialized books that exist but also training in trading, an essential step for anyone wishing to trade on the stock markets or any other financial market and finally, practice in simulation to start.