The first thing new traders need to do when it comes to trading is decide what instruments they are going to trade. Some people only trade a single instrument while the majority focus on just a few. The choice is completely dependent on the trader’s preference. For example, one trader may trade coffee, silver and natural gas while another might only trade the S&P 500. The reason for focusing on a small number of instruments is so traders can commit to mastering those markets.
Guidelines to Finding the Best Trade Ideas
- Choose a few market instruments to follow
- Master those instruments
- Remember to be selective and know your markets
- Evaluate the suggested trade ideas
Choose Your Instruments
In order to find the best trade ideas traders need to begin with narrowing their search to the instruments of the trader’s choice. Once a trader chooses the instrument he wants to follow then he will be able to see trade ideas pop up in the BetterTrader platform that only pertain to those specific market instruments.
Master the Prospective Market Instruments
A crucial piece to finding the best trade ideas is for traders to master their markets through experience. Traders need to know what qualifies as a good trade idea before being able to find the right trade ideas for them. Successful traders do not simply rely on AI, they also interact with the market and bring all the human aspects of trading to the table that AI cannot. As long as traders know their market instruments and what they are doing there is no reason to panic.
Be Selective and Know Your Markets
It does not matter which instruments traders choose to follow rather the trader’s ability to analyze those market instruments. Traders should learn how those instruments move within their respective markets by narrowing their focus to just 3 (or 4 max) instruments and by maintaining no more than one or two open positions at any given time. This strategy prevents traders from spreading themselves too thin and indefinitely learning how their instruments work. Traders will only acquire this skill, however, if they actually commit to studying these markets.
Evaluate Trade Ideas
Once traders master their markets they will then be able to evaluate trade ideas suggested to them. Being able to evaluate trade ideas is the most important piece to finding the best trade ideas; for example, current movement may be mirroring past market movement, but for a different reason. Different triggers can temporarily lead to similar market movement, but that does not mean this correlation will hold for the whole duration of a trade.
AI can suggest the same trade idea as it has in the past for similar market movement even if there is no evidence that the same trade idea will work with this newer and different trigger. In addition, the market can unexpectedly move which could have serious consequences for day traders, so it is imperative for traders to know why markets are moving.
All in all, this knowledge allows traders to differentiate between the good and bad trade ideas which ultimately gives traders the power to find the best trade ideas for them. As long as traders do not overextend themselves and actually commit to studying their market instruments they should have all the skills they need to find the best trade ideas for them.dfg