It takes just a few minutes to go online and find the phrases "plan your trading; trade your plan" as well as "keep your losses low". These bits of information can feel more like a distraction to new traders than actionable advice. If you're new at Movie Trading Company, you might just want to know how fast you can make money.
Each of the rules is important. However, when they are all combined the effects can be strong. These rules can significantly increase your chances for success in the markets.
Rule 1: Use a trading plan
A trading program is a written list of rules that specifies trader's entry, exit and money management requirements for each purchase.
It's easy to test a trading strategy before risking your money. Backtesting , also known as , lets you test your trading idea by using historical data and determine its viability. The plan can then be used in actual trading once it has been backtested and a plan has been created.
The key to success is to adhere to the plan. Poor strategy is when trades are taken that are not within the trading plan.
Rule 2: Treat Trade Like a Business
Trading should be considered a full-time, or part time, business. It is not a hobby or job.
If it is approached as a hobby, there will be no commitment to learning. If it is a job, it may be frustrating as there is no regular income.
Trading is a foxbusiness. This means that you will have expenses, losses as well as taxes, uncertainty, stress and risk. Traders are, in essence, small-business owners. It is your responsibility to research and strategize for the best possible results.
Rule 3: Utilize Technology to Your Advantage
Trading is a highly competitive business. It's reasonable to suppose that the person on the other side is taking full advantage all available technology.
Charting platforms are a great way for traders to visualize and analyze the markets. Backtesting an investment idea with historical data is a way to prevent costly missteps. With the help of a smartphone, we can access market updates anywhere. Technology that we assume is standard, like high-speed internet, can greatly improve trading performance.
Technology can be used to your advantage. Keeping up with the latest products can make trading fun and reward
Rule 4 - Protect Your Trading Capital
It takes much time and effort in order to save enough money so that you can fund a trading platform. It can be difficult to save enough money for trading accounts if it is done twice.
It is important to understand that protecting your trading capital doesn't mean never losing a trade. All traders experience losing trades. Protecting your capital involves not taking unnecessary risk and doing everything you possibly can to maintain your trading business.
Rule 5: Become Markets Students
Consider it as continuing education. Traders have to be focused on learning more every day. It is important for traders to understand that the market and all its intricacies are a continual, lifelong learning process.
Hard research is essential for traders to comprehend the facts. Traders are able to sharpen their instincts and learn nuances by using observation and focus.
Markets are affected every day by news events, world politics and economic trends. Markets are always changing. The better traders can understand the current and past markets, the more prepared they will be to face the future.
Rule 6 - Only take on what you can afford
Before you make any real cash transactions, be sure to verify that the money isn't being spent. Traders should continue saving money until that happens.
It is not appropriate to use money from a trading account for paying mortgages or tuition for children's college. Traders must not believe that they are borrowing money from this or any other important obligations.
Losing money is traumatizing enough. It is more devastating if it is capital you should not have risked.
Rule 7 - Develop a Methodology Based upon Facts
It's worthwhile investing time in developing a sound trading strategy. It is tempting to believe that trading scams are "so easy it's just like printing money". The best inspiration for a trading program should come from facts and not hopes or emotions.
Trader who don't want to rush often find it easier to navigate the web and learn. Consider this: To start a new job, you'd need to attend college or university for at most a year before being qualified to apply for the position. Trading requires the same amount research and time as other subjects.