Those who are experienced in trading knows the complexities associated with this business. Joining the trading industry might be an easy task but taking the heat of the market is very hard. The traders get confused after losing a few trades and start thinking about their careers. Eventually, they increase the lot size to recover the loss. At the end of the day, they blow up the trading account without even understanding the nature of this market. Before you start your career, you have to learn the basics of this market. Let’s discuss the few important parameters which you must learn to become a successful trader.
Technical analysis
Technical analysis allows you to find the best trading spots. Using gut feelings to execute the orders is not going to work. Most of the retail traders are losing money since they don’t know the perfect way to place their trade. They are always taking a high risk to improve their profit factors. On the contrary, the high-end professional traders are always placing a trade based on technical data. For instance, you can easily identify the major trend by using a bullish trend line. And the bullish trend line will give you the perfect place to execute the long orders. Focus on the core concept of technical analysis and you will slowly understand the perfect way to place the trades.
Fundamental analysis
Dealing with the fundamental issues are complicated. The naive traders often ignore the fundamental part. Without having the ability to analyze the fundamental data, no one can trade the market successfully. Instead of using the real account, search for the Forex demo account free. Use the demo account and try to relate the price movement of the major asset during the high impact news release. Though you will get confused after seeing the massive swings in price if you start analyzing the key details, you can easily develop your fundamental analysis skills.
Risk management policy
Learning to manage risk exposure in trading is very crucial. The inexperienced traders are always losing money since they don’t know the proper way to handle the losing trades. After losing 2-3 trades, the drawdown reaches 40-50%. And recovering such big loss is nearly impossible for the naïve traders as they don’t have precise skills in trading. Learn about the advance money management technique so that you can place the trade without taking too much risk. Follow the conservative trading method and you will be able to protect your trading capital.
Discipline
Learning to trade the market in a disciplined way is the most important thing you should learn as a trader. The naive traders are always getting excited after losing a few trades. They start placing random orders with high risk with a big hope to recover the loss. At times they might succeed in recovering the loss but they are developing a very bad habit. You have to create a balanced trading routine. Start following the trading routine as it will make you a disciplined trader. No one in this world has become successful by breaking the disciplines in life. So, ask yourself whether you can trade this market with proper discipline or blow the trading account with an aggressive strategy.
Use of the trailing stops
The professional traders always use the trialing stops to limit the risk factors. This is one of the most effective ways to make a profit by riding the market trend. Learn about the trailing stops so that you can maximize the profit without opening a new trade. And if you develop the skill to ride the major trend, you can make big profits from a single trade. There is no reason to overtrade the market. Overtrading is more like gambling and you will never make a consistent profit using such an approach. So, focus on the trend trading method and use the trailing stops to increase your profit potentials.
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.
