Trading is not easy. Therefore, in order to succeed in this area, a person should make great efforts, approaching it with all the responsibility and scrupulousness possible. Although many people today are eager to trade, only a small percentage of them achieve real success. What are their secrets? Let's try to find out what central rules and principles you need to rely on in your practice in order to get closer to trading success.
1. Learn and practice
This rule primarily applies to novice traders. However, if you already have experience in this field but are not confident in your own abilities, you can also resort to it. The essence of this rule is as follows: before you start your journey in a new field, it is extremely important to get acquainted with it in a safe environment. First, you can achieve this goal through the processing of educational materials. Many brokers offer their clients comprehensive resources in this regard. For example, on the NSBroker website, you can find a variety of articles, e-books, webinars, and other learning materials to better understand the area in which you want to succeed. Also, it is no less important to practice on a demo account where you can hone your skills. It is wrong to think that demo accounts are designed exclusively for beginners. Even experienced traders often use these tools to explore new areas or experiment with new strategies in a risk-free environment.
2. Develop a trading plan
Trading requires a methodical approach. People who aspire to reach heights in this area must understand that natural luck is not enough to close deals with profits on a regular basis. Although a variety of situations may arise in the process of your interaction with the markets, a trading plan should become a guiding star that you focus on, regardless of the circumstances. There is no single standardized form that this plan should take. Instead, you have to choose what to include in it. Optional items may be the percentage of earnings you defer from each transaction, the Stop Loss and Take Profit levels you set in each transaction, the circumstances under which you may want to open a position, and other similar elements. Trading plans can be varied. The main thing is that they give you enough criteria for entering and exiting trading operations.
3. Use risk management procedures
Trading is always associated with risk. In this respect, it is similar to doing business because you invest your resources in a certain deal in order to benefit from it, which enterprise, depending on the circumstances, can both succeed and fail. You should always be prepared for circumstances to develop according to the second scenario mentioned. Therefore, it is necessary to take measures so that potential losses do not deal you an irreparable blow. The central principle of risk management is that you should not risk excessive sums in the pursuit of profit. In that sense, the estimative category "excessive sums" means money that you can't afford to lose. No matter how attractive the potential earnings you can get from the deal, do not forget that the losses can be no less enormous. Therefore, control your ambitions and secure yourself in case things go wrong. If you do it, you will be able to withstand the blows of fate and stay on your feet to play your money back in the future when circumstances are more favorable.
4. Rely on analysis
The central objective of a trader is to predict how markets will develop in the future, near or far (depending on your strategy). How can you construct such forecasts? Of course, reaching this objective is only possible when you rely on analysis. Any attempt to guess where the price of an asset goes solely through intuition is for amateurs and people who are not serious about trading. Instead, if you want to succeed, you need the support of your two new best friends: fundamental and technical analysis. The first one will help you understand how global economic, political, and social events affect the price dynamics of various assets. As part of the second type of analysis, you will use trading tools, indicators, and charts to understand the patterns of price fluctuations and predict where they will move next. If you want to succeed, you need to master both of these types of analysis and actively apply them in your practice.
The tips above are merely the fundamental principles that you should pay attention to if you want to succeed in trading. If we wrote down all the existing rules in this area, they would not fit in one article, so we would have to write a whole book. However, these principles are enough to understand in which direction you should move if you want to become a successful trader. Take them as your guidelines and start your journey along a risky yet rewarding trader's path.