Winning RulesThe 5 Golden Rules For Winning Trading!
Diving into trading markets can be an overwhelming experience on multiple levels.
Right from deciding where to invest, how to invest, how much to invest, when to invest, when to leave a trade, ...... the list can literally go on and on. Trading is an art and mastering the nuances of this art form requires a few critical rules to be followed right from day one.
We live in a world where impatience is buried deep within our thought process and when it comes to trading, the mindset of people is no way different.
A lot of aspiring traders believe that a mere Google search with “How to reduce your losses in trading” would actually help them scale greater heights but this is never true.
A successful trader is someone who understands the core fundamentals or rules of trading and follows them blindly, thereby increasing his odds of gaining significantly from a trade.
A wrong decision can make you lose it all. So what are those five decisions that an investor needs to take to guarantee a win?
1. Use not only a strategy but several simultaneously
As well as markets have ups and downs, so strategies have always lived good times and bad times. Work only with a strategy, or with only one supplier of signals, it means to succeed to the own capital periods of winning and periods of loss. The best advice is to build a format different from trading strategies with each other in doing so we will not be forced to follow the wide undulating movements of ups and downs, but we will balance the movements trying to keep them in a slower but steady growth.
If we wanted to build a hypothetical balanced portfolio of trading signals it would be appropriate to choose the following composition, If 100 is our capital, we will invest on:
- 65% by reversal signals
- 65% of trend follower signals
The underlying reasons for this type of composition is mainly due to the fact that, the markets for the 70% of the time are in range trading and 30% for the stay in trend or in mini trend. The before mentioned portfolio is normally valid for all the types of currencies, but the exact composition varies from case to case.
2. Use not just one but several brokers simultaneously
It often happens that some brokers are more performant than others because they have a fast and efficient platform of others. Sometimes it happens that some brokers are trying to hinder the winning of your user delaying the opening or closing a trade.
Working simultaneously with multiple brokers, you can check the most powerful of the others and have a comparison of all aspects. Also divide your trading across multiple brokers means dividing the winnings into small parts to remain "undetected" in the eyes of the brokers.
3. Use a correct money management
A rule that makes a difference to safeguard our capital is to use a proper ratio of individual investments and available capital. This rule is to perform a single trade with a maximum of 3% of the available capital. Although for most of beginners traders this rule may seem trivial it is really important: without the use of this proportion you could see a significant reduction of our capital due to a normal run of investments (which happens much more often than we initially could expect).
A quick loss of part of our capital would inevitably push us having to make up the loss, forcing us to a disadvantageous position especially from the psychological point of view, which often leads traders to lose the entire capital.
Often the minimum required by the broker that settles in most cases is about $ 200.
4. Use a Psychological Plan
It is very common for a new trader to lose patience, get emotional while trading and make a mistake, over trade, and a lot more. While trading, it is very important to use a psychological plan and stick to it no matter what the situation is. The main psychological rules are the following:
- Avoid to increase sums of money after a heavy loss.
- Use patience, and always plan your day to day investments.
- Do not go over your time limits as that can lead to uncalculated disasters.
- Try to stay focused without distractions in order to be precise to the maximum.
- Be happy when you win and sad when you lose, but don’t let these feelings drive your trading we are not serene try to detach the work until we find the right concentration
5. Choose the best deal
If you are trading on financial markets, volatility and trades length will play an important role for you.
To reduce the risk in trading, the investor should be expanding his horizons by making both short and long term investments. Short term investments are shorter goals while long-term investment (investments) takes (take) time but can give better profits. Use them both and try to figure out how to get the best from this balance.
Volatility is one of the most crucial technical aspects. It is high when you determine market movements decided rather than let us work on several minor movements and random, and this determines the very success of our trading.
When the market is volatile, we must harness the "sentiment" of the moment and not think in terms of long and unpredictable, thus shortening the time of our trade, so we decrease the risk of a wrong prediction.