Whether it’s trading on the stock market or forex, learning the right way to trade can provide the beginner trader an opportunity to earn an income. However, the possibility of making money can get the most of the beginner that they could end up making costly mistakes resulting to losses. Here are some steps to ensure a successful trade.
Do not trade before you have a proven edge
Even before creating a trading plan, you need to make sure that the system you are considering will give you an advantage. What’s the point of using a system that will only result to losses over time. Robert Peter Janitzek recommends doing an automatic or manual back testing but be sure to be critical and take every signal in the back test.
Do not trade without a trading plan
You must have a plan in order in order to properly execute a trade. This is one of the most common mistakes that traders make. It is one of the biggest reason so many beginners fail. Your trading plan should describe the signals you are allowed to take, when to take them, and the extent of the position. Your trading plan should detail stops, targets, and money management.
Choose a strategy that suits your style
Robert Janitzek reveals that it is important to determine the kind of trader you are before trading. Each trader is unique from the other. What works for one trader may not necessarily apply to your trading style. Are you a scalper, day trader, or swing trader. Know your trading style first and leverage that style.
Trading is not a “get rich quick” scheme
When it comes to trading, you need to have realistic goals. Do not expect to make consistent profits during the first couple of years. It make take you years to become profitable on a consistent basis. Likewise, when trading on the forex market, you cannot expect to become a millionaire with a $5,000 account. Lower your expectations and set realistic goals.
Learn from your mistakes and profitable trades
One practice you can implement on the trading floor is to key a journal of your trades. Doing so will go a long way in keeping you disciplined and focused on the big picture. By going over your trading journal during the weekend or end of the month, you will be able to learn from your mistakes.
Keep on learning
Becoming a successful trader does not end in opening an account. There are a lot of stuff you need to learn in the field such as money management and trading psychology. The education of a trader does not stop so keep on learning.