Trading methods or techniques for maximum success
No matter which firm, bank, or broker you choose to trade with all the advice available indicates that you will need to do some homework first. There are a number of ways to get started, the online option is by far the most popular, firstly as it is so accessible, secondly there are a number of courses on offer for free, thirdly you have dozens of options to look into. Once you understand the terminology and are ready to get going learning the techniques of trading will be the fine-tuning. This is where the charisma of the business lies, either making money or losing money in a very short space of time.
Methods or Techniques
Every trader will have their individual style encompassing their preferred trading methods or techniques for maximum success. Here are some guidelines to help to find your own style or method:
- All traders suggest having a trading plan. This plan should have a position, why you enter, stop loss point, profit accepting point, good money management strategy. Having a solid plan will help in removing emotion from your trading allowing you to think more clearly, step by step.
- Always follow the trend, never go against the flow.
- Never trade more than 10 % of your deposit in any one single trade, by not protecting your capital you could quickly be out of the market.
- Cut your losses, by trying to hold onto a bad trade in the hopes that the price will rise holding on will probably result in bigger losses. Know your stop-loss price, at this point you should sell when the trade goes down.
- When the going is good, take the profit, know how much profit you are prepared to take. You may take the profit in stages or all at once. Once you have earned your trading cost you are home and away so you can relax and watch profits soar.
- Be calculated and prepared. Emotions run high in this game as in gambling, by being emotionless you will save yourself from making irrational and instinctive decisions. By observing a professional trader would be a bit like watching a professional poker player, never knowing if he had a winning hand or was bluffing.
- Again as in gambling, never trade on a tip. Trade with caution, knowledge, and facts not information from an unknown source.
- Keep a record of all your trading, not only dates and which currency but also the reason, this may help you to not repeat mistakes or remind you of a job well done. By analyzing your records you will learn and improve.
- Don’t cross the line, if you are doubtful of what the market is doing, then step aside. It may be the time to sit back and learn without the burn.
- Having more than 5 trading positions at once is more than sufficient. Otherwise, you will lose control and will make decisions out of stress or fear.