10 Things To Keep In Mind If You Want To Become A Successful Trader
When you are new to trading and are Googling what it takes to be a successful trader, you’ll quickly become familiar with terms like "plan your trade; trade your plan" and "minimise your losses." And the amount of information available can soon overwhelm you. So, here is a simple, 10-step Gyan about what you should do in the first year of trading. Each of the guidelines below is vital, but their combined impact is powerful. Remembering these can considerably boost your chances of market success. But before we get into the article, make sure to always choose an online trading platform that offers either lowest brokerage or zero brokerage intraday trading. Never trade without a plan. A trading plan details a trader's entrance, exit, and money management criteria for each buy. With today's technology, it is easy to test a trading strategy before risking actual money. Backtesting allows you to test your trade concept using past data to see if it works. Once a plan is devised and backtested well, it can be employed in real trading. Your job is to simply keep to the strategy. Trading outside the trading plan, even if profitable, is considered a bad strategy. Trading As A Business Trading should be treated as a full-time or part-time business, not a pastime or profession. As a hobby, there is no genuine commitment to learning. A job without a regular income might be frustrating. Trading is a business with costs, losses, taxes, stress, and risk. As a trader, you are a tiny business owner who must research and plan to optimise your profits. Embrace Technology Trading is a cutthroat sport. It's safe to presume that the most successful traders use all available technology. Traders can use charting software to view and analyse markets in limitless ways. Using a good and trusted online trading platform with the lowest brokerage or zero brokerage for intraday trading is another important strategy. Backtesting an idea with historical data saves money. We can track trading from anywhere with our smartphones. A high-speed internet connection, for example, can considerably improve trading performance. Technology and keeping up with new products may be exciting and lucrative in trade. Preserve your trading capital. Saving money for a trading account requires time and effort. It's considerably harder when you have to do it again. Notably, safeguarding your trading capital does not imply never losing a trade. Every trader loses. Protecting capital means not taking needless risks and protecting your trading enterprise. Become a Student Of The Market Consider your career in trading as lifelong learning. Traders must keep learning every day. Remember that learning about markets and their nuances is a lifetime endeavour. Studying hard helps traders grasp economic information and help them develop an edge over the others. The ability to focus and observe allows traders to refine their skills. Politics, news, economics, and even the weather affect the markets. The market is fluid. Traders are better prepared for the future if they understand the past and current markets. Don’t Trade More Than You Can Afford to Lose First, be sure that all of the funds in your trading account are genuinely expendable. If it isn't, you should save. Money in a trading account should not be used to pay for college or the mortgage. It is dangerous to use the money for trading that is earmarked for critical expenses. Money loss is bad enough. It's even worse if it's capital that should never have been risked. Develop a Fact-Based Methodology Developing a strong trading strategy takes time. It's easy to fall for the online trading scams that promise trading strategies "so easy it's like printing money." Facts, not emotions or hope, should guide the creation of a trading strategy. In general, traders who are not in a hurry to learn can sort through the internet's vast amount of data more easily. Suppose you wanted to change careers, but you needed to spend a year or two in college to be qualified to apply for a job in the new field. Learning to trade takes at least the same amount of effort and research. Use a Stop Loss As a trader, you set your own stop loss. The stop loss might be in rupees or percentages, but it restricts the trader's risk. Using a stop-loss reduces tension when trading since we know we will only lose a certain amount. Even if a trade is profitable, not having a stop loss is undesirable. The trading plan's guidelines allow for lost trades to be exited with a stop loss. The aim is to profit from every trade, but that is unrealistic. Using a precautionary stop-loss reduces losses. Know When to Sell Inefficient trading plans and ineffective traders are the worst combinations for a trading career. If you feel like your trading strategy is not responding well over a period of time, then take the time out to re-assess and develop your strategy again. An unsuccessful trading plan is an issue that has to be solved. It is not the end of a trading career. An ineffective trader is one who sets a trading plan but is unable to follow it. External stress, bad habits, and inactivity all contribute to this issue. Traders who are not in top trading condition may consider resting. After resolving any issues, the trader can resume operations. Remain Focused on Trading Trade with a big picture in mind. It's normal to lose trades; it's part of trading. A winning deal is only one step towards a successful business. And the cumulative profits matter. A trader's performance improves once they accept wins and losses as part of the business. That is not to imply we cannot be happy about a successful deal, but we must also be aware of the possibility of a loss. Setting realistic goals is important for a trading career. Your company should make a reasonable profit in a reasonable time. Expecting to be a multi-millionaire by Tuesday is a recipe for disaster. Conclusion Understanding the value of each trading rule and how they interact can help a trader build a profitable trading firm. Traders who follow these criteria with discipline and patience might boost their chances of success in a highly competitive market.