If you search on the internet regarding trading, you will get hundreds of phrases to plan your trade,” “trade your plan,” or “keep your losses to a minimum.” But without its reading plan or actionable plan, they are just a kind of distraction. If you are a new kind of trader in the market, then you should start from the basics and focus on practice.
Here are a few rules that you should keep in mind during your whole journey:
- Always use a trading plan
Many people don’t know about the trading plan it is a set of rules that a trader should follow during the entry, exit, and management of the trade. If you use today’s, then it is very easy to test a trading idea before risking your real money, and this process is called backtesting. You should find a trading plan by back-testing it on different kinds of market scenarios and making rules accordingly.
- Treat your business
The next thing you have to do is to treat your trading like a business and work diligently. Trading is a business that includes expenses, losses, uncertainty, stress, and risk. As a trader, you should know very well how to manage these kinds of things in your business and grow more.
- Use technology to your advantage
Trading is a kind of competitive business, and it is very safe to assume that a person is sitting on the other side of the trade and taking full advantage of the available technology. There are highly advantageous charts that are available on the internet free of cost. You should have to back-test your idea on historical data and build up a great trading plan for your business.
- Protect your trading capital
Trading is a game of protecting capital more than making money. The more wisely you play with your money the more money you can make through this market. Make sure you are very patient with the market and learn in every kind of market scenario how to make money.
- Prefer to become a student of the market
Trading is a field where you have to learn constantly from the market and remain a US student of it. After winning two or three traits, you will keep your confidence and be grateful to the market. The market has more big players than a specific person, so you should learn from each and every movement in trading and learn to survive.
- Risk what you can afford to lose
Before using real cash, you should be clear on the amount that you can afford to lose without any inconvenience. If you have money to pay the rank or to pay the school fee, then make sure you are not going to trade with that money.
If you want to be a disciplined and profitable trader, then make sure you are following all the above rules like a Bible. Apart from all the above, you should also maintain a journal and keep a track record of each and every trade you make. This journal will help you to be a better and improved version of yourself.