As traders, we must follow rules in order to be able to become successful and make a living from trading the financial markets. This might seem like a daunting task when you start off with your trading journey, but like everything in life that is worthwhile, if you put in the effort, you will come out smiling at the other end.
In order to become successful, there are a couple of things that you need to take into consideration and others that you must live by religiously. My aim for this post is to bring five of those points under your attention that you must always follow to become successful in trading the financial markets.
We first want to have a system and strategies that have been back-tested extensively and has proven to be successful over a long period of time. Here at Trading College, we use the Pro-Trading System (PTS) which has been created nearly 10 years ago. In this time period, the PTS has proven to be a highly successful system and is something that we cannot live without. Using a system makes trading decisions easier, as it takes a level of emotion away.
Secondly, we never want to force ourselves to get into any trades. Patience as traders is key.
Losses should always be smaller than your winning trades. If you have big losses, and lots of small winners, the effect on your psychology is going to be detrimental. The reason for this is that you might have 10 small winning trades, and 2 big losers, wiping out the profits from your previous 10 winning trades and that is not good. You will have the feeling of having more winning trades, but you will not be profitable.
Never keep adding to a losing position, trying to average down on the loss you might be in. Before you enter any trade, you should be aware of your entry, stop and exit criteria and accept the risk involved.
Last but by no means the least, you should always follow a process and not skip a single step in the process lined out for your strategy.
If you’re looking to step into the world of online trading, we’d like to help. We offer both courses and mentoring opportunities to help you trade with skill and confidence. Come along to our free* Learn to Trade Live one-day course on Saturday 12th January in London, to really get your foot in the door!
*You will pay a £50 refundable deposit to secure your space for the course, which will be refunded the following working day after you attend.
Three Types of Analysis To enhance results, you are going to need to be able to appropriately analyse the market. This usually involves taking a wider view of economic trends. Effective market analysis begins by paying attention to the situations in one country and...
So here we look at the Pro Trading System latest trading results and signals which you can see in the P&L section. This is the pips profit. If it is red, it's currently in a losing trade and if it is green it is making a nice profit. For example, the USDJPY is profit...
When someone starts their trading journey, they need to start to think in probabilities, which is a challenge for some people as it is not something that we as humans do daily. This means that traders need to start to think differently when they trade. This brings us...