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For a great start in online trading, plan before!

  • 30 July, 2021
  • 12:30 pm EEST

trading

Some points to consider in your trading strategy:

The perfect trader does not require the perfect ingredients. All we know is that there are certain fundamental facts that must be followed in order to be prepared, efficient, and cautious while trading with real money.

Even the most experienced traders can be victims of their own irrational judgments, because we are all human, and we are most often led by our emotions, especially when it comes to endangering our own money!

So, what are some of the greatest trading methods we may follow to stay on the winning side?

  1. Be practical in your approach. Examine the larger picture and try to connect the dots between news events so you can start spotting trade opportunities when they appear.
  2. Analyse logically. Once you start to base your analysis on logical thinking, making sound trading decisions will come second nature!
  3. Don’t trade for the sake of trading. We can only trade what is in front of us because the market is turbulent. We may be able to start multiple trades one day and then not be able to place a trade for two weeks the next. Instead of opening random anomalous trades that will not benefit you in the long run, you should be patient and wait for positions that coincide with your plan.
  4. Understand your mistakes. Even the most experienced trader makes mistakes so it is important to be able to understand the logic behind these mistakes. Common trading mistakes include; trading on numerous markets, inconsistent trading sizes and over-leveraging.
  5. Limit your options. Make sure you write down a set of guidelines and follow them. When opening a transaction, try to grasp your risk-reward ratio and make sure you exit the trade according to those ratios. Setting a profit objective and a stop loss might help you remove emotion from your trading.
  6. Manage your risk. It’s common sense to never invest more than you can afford to lose, and that’s exactly what you should do. Many traders get carried away and believe that when they close several winning trades, their luck will last forever. This is never the case! Be wise, and know when you have reached your limits. Take care of your funds.
  7. Maintain a straightforward approach. Don’t make your trading strategy too complicated. Using an excessive number of indicators and other tools will cause you to deviate from your original plan; more numbers equal more issues, such as having too many active transactions at once.
  8. Trailing stop. No one wants a winning trade to become a losing trade so always keep a trailing stop loss!
  9. Keep learning. It’s imperative to keep learning as a trader, educate yourself and do a post-trade analysis. By keeping a trading journal, you can analyse what works for you and what doesn’t.

Although the above are not all of the solutions to a healthy trading strategy, they are an excellent place to begin. Whatever your trading situation, maintain a positive and focused mindset. Trading is difficult, but with a little self-discipline and effort, you can learn to control your emotions!

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