Becoming a successful trader in the industry is harder than it looks. The unreliable profit turnout and the increasing washout rate of the participants can always be demotivating. However, we present here some of the golden rules to becoming a better trader. Though it might be full of risks, you can increase your chances of success in trading with these simple rules.
Rule 1. Always follow your trading plan
This is the most significant rule of all. A disciplined start with foolproof planning and well-established practices will take you a long way.
Today, you can use the latest technology available to assist you in making a trading plan. A reliable automated trading platform allows traders to establish rules for trading entries, exits, and money management. Thereafter, you can simply use your computer to successfully monitor and execute the trade.
Rule 2. Mastering one strategy at a time
Always master one strategy first and then move on to another. Keep your focus at one place at a time and learn all the nitty gritty of the trading style. Having a strong hold over the strategies will help you gain higher profits in the future. But, make sure you don’t rush through the learning.
Until you have gained enough experience and knowledge, don’t try to be a jack of all trades.
Rule 3. Become Tech savvy
Trading is full of competition, and you should never underestimate your competitors. Today we are surrounded by so many advanced technologies, then why not use them to our advantage.
Back-testing, charting platforms and getting market updates on your smartphones will make trading much easier for you. Not to mention, the wise use of technology will give you an upper hand over your competitors.
Rule 4. Risk wisely
Funding a trade can be a long and tedious process. While trading, you should always remember to risk only that you can afford to lose.
A trader must always be prepared to lose all the money in a trading account. Losing money can be a blow enough; it will be even more difficult to lose a capital that should never have been risked.
Rule 5. Use a stop loss
A stop loss is a predetermined risk amount hat a trader will accept with each trade. It can either be a currency amount or a percentage. In either way, it helps to limit one’s exposure during a deal.
To know beforehand the amount of money that can be possibly lost helps to keep your losses in check. Even if you are winning trades, ignoring a stop loss can be a bad practice. A stop loss will always help you ensure that your failures and risks are limited.
Rule 6. Keep learning daily
You must have always heard of the saying, “learning is a process that never ends.” Well, it becomes a key to becoming a better trader.
The market changes every minute with fresh traders coming in every day. In such times, your strategies which have been successful a few years back might flat on their face today. Thus, it becomes imperative to keep educating yourself on a regular basis and be up to date with the market.