In order to be in the 5% of people that profit from trading, you need to be a pro, or take advice from the pros. Here are 5 steps professional traders use to trade and help them be successful.
Rule 1: Constantly be educating yourself about the market
The market is always evolving and growing. As a trader you need to be able to keep up with its constant change. Traders need to remain focused on learning more every day. Politics, events, and economies all affect the markets, so it is important to understand not just current but also past markets. This helps a trader be better prepared for future occurrences and trends.
Rule 2: Pay attention to your risk
Your risk is the one thing in the market that is under your control, so be smart about the way you calculate and execute risk. Always use a stop loss to limit exposure during a trade. It is a key step in ensuring that losses and risks are limited. Additionally, do not risk more than you have! If something fails, do not get nervous and alter your original plan by risking more, as it will lead to greater loss in the long term.
Rule 3: Use all available technology
We are in the age of technology, where there are a plethora of available technologies available to help with trading. One can be assured most other traders are using these technologies, so you should too. For example, charting platforms allow traders an infinite variety of methods for viewing and analyzing the markets. Backtesting an idea on historical data prior to risking any cash can save a trading account, not to mention stress and frustration. Getting market updates with smartphones allows traders to monitor trades virtually anywhere. All of these technologies can only benefit your trading experience. One platform seamlessly combining real-time market data and live news updates is BetterTrader.co.
Rule 4: Keep it simple!
The goal should not be to trade a million different markets at the same time. You’ll be a more successful trader if you keep it simple and focus on a few markets that you can watch and master. Ultimately consistency and simplicity are beneficial.
Rule 5: Stay calm and be patient
As Charlie Munger says: “The big money is not made in the buying and selling… but in the waiting.”
Patience in trading is key and specifically important in entries and exits. Don’t rush these. It should take time to perfect the entry and exit points. Additionally, sometimes, the market can correct itself so a seemingly large loss will become a smaller loss if you wait and don’t pull out right away. Keeping your calm and making smart well thought out decisions will end up being better and more successful in the long run.
By following these steps you can go from an amateur trader to a successful one. The BetterTrader web and mobile app and tools are key can help in achieving this goal. BetterTrader can help you stay up to date in news and ahead of the game in trading. Sign up and begin trading today.