Diana Smith
One of the greatest misconceptions regarding trading is that this industry is somehow governed by luck. Just because you don’t see the forces that are pulling the strings of the global market doesn’t mean they aren’t there. Like any other line of work, online trading has its own rules and by learning at least some of them, you can drastically improve the effectiveness of your game. Here are four tips which could turn you into a much more efficient online trader.
Set a stop loss
Before you even start trading online, you have to devise a way to make it more business-like and make it less like a gamble. You would be surprised at how many industry first-timers make this mistake. If the value of your stocks is going down, you can only hope that this will change soon, but you can’t rely on it. This is why you need to determine a stop loss; a point beyond which you simply cannot go. In a situation where you are already a full-time trader, this stop loss should be a low fixed percentage like 1 or 2 percent of your entire account. What this means is that you should lose on, at least, 50 to 100 trades in order to be out of business.
Set a win stop
Another thing you need to keep in mind is that your luck can turn when you are winning, as well. This creates a need for you to determine a win stop. If you make the win stop at somewhere like 5 or even 6 percent of your total value, you can easily generate profit with as little as 25 percent overall successful trades. Needless to say, this leaves you with odds that are heavily in your favor.
Choose a strategy
The above-listed two tips are vital, regardless of the volume you trade in, but in order to work, they need to become a part of a much larger system; a trading strategy. Here, you have various proven methods such as trend trading, momentum trading and swing trading, all of which determine your course of action in the fact of a current market trend. The greatest downside of this strategy is that people tend to customize too much or simply give up ahead of time. In order to see its full effectiveness, you need to persevere for at least a full year. Costly as this may sound, what other choice is there for you?
Finding the right tools
Traders of the 21st century cannot allow themselves to go underprepared into the world, which is why they need the right tools for the job. The first step here is finding the right social trading platform, which allows a list of highly sophisticated trading features like copy trading and online auto-trading. By putting you in touch with all the latest market occurrences, you will be able to react in real-time and gain a significant competitive edge against those who go around this the conventional way. Furthermore, the automation processes enabled by such a platform can make it adhere to a trading strategy much easier.
Keeping up with these four tips alone can drastically increase your odds in the global market, even if it can’t guarantee you success with 100 percent reliability. Nothing can. One of the main advantages of the above-listed tips is that they make your learning curve much smoother by minimizing the error margin. These strategies give you more time to acquire all the necessary knowledge and experience that may be required in order to start considering yourself an expert trader.
