The Seven Trading Tips For All traders

Trading tips for All traders

1. Always utilize a stop loss.

Trading is all about time. Sports are the same way. When you are caught off guard in tennis, you do not remain in your corner hoping the ball will come back so you can hit another volley. The same thing happens when you miss a soccer kick, a football throw, or a baseball or cricket hit. You accept the defeat and move on.

If you want to remain in the game, you must follow the same exact rules in trading as you do in sports. For example, if I trade on Meta Trader, my execution scripts have built-in stops and targets. When I trade on TradingView, I utilize custom  Auto Hot Key scripts to do the same thing. When I trade stocks, I usually utilize diagonal option spreads to communicate my opinion since the stops are built into the strategy. And, if I am trading from my phone, I always set the stop soon after I start the trade and then worry about exits afterwards.

2. Always have a plan in place.

Sports are highly defined games with a definite set of rules and you know in each sport what you are going to do next after you miss. Many traders get disoriented when they are stopped out since they have no idea what to do next.

I was only able to consistently respect stops after determining what I would do next in the event of a stop out. Only then did my conduct seem almost natural.

Instead of expecting your trade would be a winner, anticipate it will be a loss and consider what you will do next. Will I search for the same setup again? Will I move the time period of the setup? Will I go with a different size? Will I broaden my targets and setbacks? Whatever you do, always have a plan and then follow through on that plan. This manner, instead of languishing in self-pity, you will be looking forward to what comes next.

3. Have confidence in the setup and let the details grow

It makes no difference whether you trade trend or fade trend. You need to have confidence in your broad setup and stop compulsively adjusting the strategy before trading it. K is a long-term trader who has been trading Zip for many years. Her entry conditions are very much set in stone, but she is ruthless on any trade that swings even a few pips against her. As a result, her stops and targets are very fluid. I trade reversals all day using Bounce, but I have a strict no-exit policy. I always wait for the stop and target to hit into contact. Even if the trade gets within a 1/10th of a pip of the target and then reverses and stops me out, I will re-join on the next setup and do the exact same thing because that is the only way the arithmetic of my set up works.

Why do K and I trade in such different ways? Real market experience. We both have complete confidence in our entrance signals, but we have discovered what exits work best for each of us via many hours of trial and error. This information cannot be established in advance. As a result, all backrests fail. You must allow the information to emerge.

Also Read: Tips and Tricks On News Trading

4. Be a traveller rather than a tourist.

"Be a traveller, not a tourist," said Anthony Bourdain, who created so many outstanding travel films. He intended to say, "Get filthy." Do not only follow to the well-worn trails outlined in guidebooks. Wander out on your own, explore the area, taste the cuisine, and converse with the people. Make the trip your own.

Trading works in much the same manner. We are all taught the same tried-and-true trading tactics. Never blindly follow them. The most successful traders in our group constantly tweak both K's and my ideas to make them uniquely their own. Every strategy is nothing more than a formula. To genuinely appreciate it for the rest of your life, you must adjust to your tastes.

5. Only use leverage that is ultra-low or ultra-high.

If you are actively gambling on margin, I do not believe there is a happy medium. You may either trade like an insurance firm, with ultra-low margin sizes, to absorb enormous losses and attain a very high win/loss ratio (many of little wins and one or two major losses), or you can trade like the lottery, with highly leveraged bets in the hopes of hitting a lengthy winning streak. (As an aside, every single trading contest winner applies the lottery strategy, which is why you never see them repeat the accomplishment more than one or two times in a succession.)

Also Read: How To Choose Between Short-Term And Long-Term Trading

Before you begin trading, regardless of how you do it, you must first understand the rules. Do you want to treble your account in a matter of months? Then trade with huge leverage and be prepared to lose your whole money at least once or twice. Do you want to make money practically every day? Then, trade with ultra-low leverage and aim for a few basis points every trade.

You only have two options. Everything in the centre is a waste of money. (Note that the key term here is ACTIVE TRADING.) I am not talking to you if you make three or four transactions every month.)

6. A single pip makes a significant impact.

It is incredible to grasp the power of only one pip if you are an active trader. If you make at least 10 deals every day, you will make roughly 2500 trades per year. If you can increase your profit target by just one pip, you will have achieved a 25% increase in your account on an unlevered basis. Of course, it is completely ridiculous since the example presupposes that every trade is a winner, but the premise remains. When little gains are accumulated over time, they might result in significant performance disparities. $100,000 compounded at 10% yields around $250,000 in ten years; however, if you push just one pip more and add 5% every year to that return, the ultimate result is $400,000.

7.  Track your progress for at least one period.

Never ask yourself, "How did I do today?" if you are day trading. Rather, assess your weekly progress. If you are swing trading, look at your quarterly performance rather than your monthly profit/loss. If you are investing, divide your time into three-year increments.

My day trading improved significantly when I began to set weekly objectives rather than daily ones, which allowed me to accept daily losses with grace. The more you move away from your immediate time frame, the more you will be able to escape the recency bias, therefore alleviating the manic/depressive cycle that we all experience.

The game is not about today, tomorrow, or even next year. The goal of the game is to succeed in trading for life.