1. Get Your Feet Wet Gradually
Most of the new traders start by opening lots of trades, then find it difficult to track them all.
By focusing on some trades, and picking them more carefully, you will have more opportunity to learn lessons from the trades which you can use to improve as a trader.
2. Preserve Your Capital
Profits are there for making, but the actual key to success is not just to make the profits, it’s to keep them.
Letting profitable trades run, cutting losses quickly and keep it cool under pressure is your best route to profitability in the long term.
3. Stop Forgetting Your Stop Loss
A key reason people quit trading is huge losses, and the single biggest cause of losses is a failure to use a Stop Loss.
Using the Stop Loss will prevent your losses from getting out of hand when the market goes against you. Use it wisely, and you will see your losses reducing.
4. Build A Trading Plan/System
Every trader develops their trading system, depending on the amount of time they dedicate to trading.
Traders with more time may adopt the day trading strategy, while others might prefer for the long term positions. Whichever trading style you adopt, Just stick to your trading plan.
Many of the new traders switch approaches when they experience losses. However, one or two losing trades don’t mean that your system is not going to be successful.
5. Don’t Cut Your Profits Short
The mistake of new traders is to tend to make closing their winning trades too early.
By sticking to the trading plan, you can learn to avoid them by making hasty exits that reduce the returns.
6. Don’t turn Profitable trades Into Losing Ones
Once the market is going to your way, and positions show the profit, keep a close watch on them.
Move the stop loss forward to your entry point to secure your investment.
Then keep moving it forwards, in the direction of the trend, to secure your profits and prevent your trade from the slipping back into a loss.
7. Plan Ahead
Never enter the trade because the price is suddenly rising or falling. Always plan your trades.
Know your desired entry point, Take the Profit and Stop Loss rates before you trade and wait for the best opportunity to arise.
8. Trends Carry Momentum
New Traders are often unaware that as the new trend starts to build, its momentum tends to increase.
New traders will tend to jump on board an emerging trend, strengthening it as it continues to develop.
Try to trade with the market momentum on your side, as it will often push your trades in the right direction, hitting the profit targets sooner than you might expect.
9. Don’t Waste Time On A Losing Trade
If you find yourself in the losing position, recognize that it is better to save your energy, cut the losses and move on to the next trade.
The financial markets are full of profitable opportunities, just waiting to be utilized, so don’t waste your time on an unprofitable trade. Put these trading tips to work today.