Anyone can earn on the financial markets, but no more than 90% of traders achieve success in the long term. Here are the basic rules that will allow you to make a profit and not to be disappointed in trading.
1. Create a trading strategy and work plan
Most often, traders, especially beginners, decide to open a deal based on intuition, or constantly change the plan, testing more and more new strategies. With this approach, you should not count on a positive result. It is necessary to develop the most detailed algorithm of actions and strictly adhere to it.
You can find descriptions of various strategies on the Internet, so try some of them and in the meantime study additional materials to develop your plan later.
During the first week of trading practice on the demo account, and only then go to the real one.
Test your trading strategy on historical data for a long period before using it in your life.
Describe in detail all the components of the algorithm, including the conditions for opening transactions, the method of selecting instruments for investment, all the possible risks, and rules of capital management.
Many traders also include charts that show the ideal trading situation and then try to find similar formations to repeat trades that have been profitable in the past.
2. Practice regularly
One of the most popular books on trading, "The Daily Trading Coach" by Brett Stingbarger, repeatedly holds the analogy between sport and trading. A professional sportsman thoroughly practices every slightest movement to ensure that the sequence of correct actions reaches automatism.
The same applies to trading: on a trading account with starting capital, every element of trading should be practiced, including the moment of opening a deal, holding an open position and closing it. Also, we need to experiment with different types of orders and financial instruments.
3. Choose a reliable company with acceptable conditions
The most important rule of each successful trader is to work only with reliable and verified brokers. Trading on financial markets requires a lot of attention, so do not be distracted by technical and organizational tasks.
The issue of reliability and regulation of companies is also important. At the stage of choosing a broker, pay attention to how the company solves controversial issues. Some brokers render additional protection to their clients.
4. Save up your starting capital
Stories about how to get rich with a couple of hundred dollars have little to do with reality. With a competent approach to risk, an experienced trader earns 10-15% of his capital per month. You can get a big profit, but in this case, the risks will be overstated. To make a significant profit, you need to start with the capital, which is equal, for example, to your monthly salary.
5. Get a mentor
And back to sports again. Is it possible to imagine a professional athlete who owes all his success exclusively to himself and did not work with his coach? Except for the rarest talents, no such examples can be found.
The same applies to trading: at the initial stage, you need a mentor who has experience and necessarily receives the main income in this field. This can be a friend, acquaintance or personal manager in a brokerage company.