1. Trade with money you can afford to lose
Successful traders have a “little bucket” of risk capital and a “big bucket” of money they’re saving for retirement or another long-term goal. Big bucket money tends to be invested more conservatively and in longer-duration positions. It’s not absolutely forbidden to use this money occasionally for daily trade, but the odds should be very high in your favor.
2. Be Patient
Paradoxical though it may seem, successful traders often don’t trade every day. They may be in the market, at their computer, but if they don’t see any opportunities that meet their criteria they will not execute a trade that day. That’s a lot better than going against your own best judgment out of an impatient desire to “just do something.” Plan your trades, then trade your plan.
3. Be Disciplined
Again, you need to set a trading plan and stick to it. If you’re trading on your own, impulsive behavior can be your worst enemy. Greed can keep you invested in trades that do not seem promising enough. Don’t expect to get rich on a single trade.
4. Don’t be afraid to push the button
Novice day traders often face “paralysis by analysis” because they get wrapped up in watching the candles on their screens and can’t act quickly when the opportunity presents itself. If you’re disciplined and work your plan, actually placing the order should be automatic.
5. Never risk too much capital on one trade
Set a percentage of your total trading budget (which might be anywhere from 2% to 8%, depending on how much money you have), and don’t allow the size of your position to exceed it. Otherwise, you may miss out on an even better opportunity in the market.
6. Don’t second-guess yourself, but do learn from experience
Every day trader has losses, so don’t kick yourself when the occasional trade doesn’t go your way. Do, however, confirm that you followed your rules-based strategy and didn’t get in or out at the wrong time.
NOTE: This article is not a bit of investment advice.
3 Comments
Very very informative article brother. Mostly traders do not follow these steps and lose trades. Actually, the thing is greed and impatiency is a must in new traders thats why they ignore these basic points and lose their money.
Anyways very useful article this is. Plz keep up your efforts for begginers.
Thank you very much. Stay blessed
I came from your youtube channel and was not disappointed.
I believe the 3rd point has to be the most important one in this list.
God knows how many times the lack of discipline screwed me over.
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