Rules are made so that we can make our life easier. People who think they can lead a life without having any rules are making big mistakes. No one can become successful unless they have proper rules. You have to lead your life in Singapore in an orderly manner. Participation in different sectors in a random manner never results in good outcomes. Just like this, professional investors have to spend some time and learn about the essentials of the market. As they study the critical market data, they will become more interested in the rules. Though there are thousands of rules to follow in the CFD market, today, we are going to highlight the most important rules. Let’s get into the details.
Money management
The first thing you should learn in the ETF business is money management. People don’t give any importance to this section as they get the leveraged account. They start taking high risks in the trades and expect to win big amount of money. But taking high risk in each trade usually results in big losses and investors fail to manage the risk profile in an orderly manner. For the safety of the capital, you must keep the risk below 3% in each trade. If you break this rule, it will be a big challenge to overcome the losses. People who have strong analytical skills do relatively well. Soon they become greedy and increase the risk just to earn more money. But such aggressive steps always result in big losses. For the ease of traders, the demo account is introduced in this industry. Use that to learn the role of money management at trading.
Trade with a routine
The professional traders in the ETF trading industry have a precise routine. They are not taking random trades just to earn a huge amount of money. But if you do the digging, it won’t take much time to realize trading is not a tough task. Thousands of traders are earning big amount of money just by taking the trades in a rational way. Follow the safety protocol so that you can earn enough and support your family. Never become too greedy with your approach. Stick to the routine no matter what the result is. It should help you to improve your skill in the long run.
Stop taking more than 2 trades
Taking more than 2 trades is also known as overtrading. You may say the scalpers can take more trade to earn more money. But this is not true. The professional scalpers take only two traders per day. Anything above it is considered as overtrading. When you get involved in overtrading, you should start facing serious problems with money management. For ease of use, you can test different kinds of trading techniques in the demo platform. Soon you should realize taking more than 2 traders per day is a very risky technique. Traders with more than 5 years of experience don’t feel comfortable with such an approach. So, never try to get engage in overtrading the market as it can result in serious problems.
Accept the losses
To be a disciplined trader, you have to accept the losses. Accepting the losing trades is a very big challenge. We are not designed to accept financial losses. We always look for ways by which we can avoid such losses. But soon you will realize, investment is not the field where you can ignore the losing orders. Trying to avoid losing orders will result in disasters. You will be breaking the important rules and this should create massive confusion in your mind. For the safety of the capital, always follow a strategic path and be ready to accept the losing trades. This will make you a confident trader. Remember, confidence is very important to build up your trading career.
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.
