Are you thinking about stepping into the trading world but just don’t know how? If you are such a one, don’t worry. This article will provide you with some foundational tips in addition to some other interesting details, so you will want to stick around for this.
Do you actually know that over 90% of stock market traders incur losses, with insufficient knowledge being one of the main contributing reasons? No one definitely wants to be part of such a statistic. So, in this sector, where things can get quite complex, getting the right knowledge can really be helpful.
The power of practice and consistency
Power and consistency are the true engines of successful trading—knowing when to act and having the discipline to do it repeatedly over time. High-leverage trading plays a key role by magnifying the impact of consistent, well-timed strategies. When used wisely, leverage can boost returns and accelerate progress toward trading goals. However, without consistency, even the best tools can quickly lead to losses.
It’s just like in real life when you would want to move a car from Point A to Point B; if you aren’t well acquainted with the particular car, your plan could actually disappoint you. That is why, in trading, you’d need to take advantage of features like demos, which help you discover some new skills in a risk-free environment.
But if you are stranded about where to get such experiences, there are numerous resources online. For instance, you can learn more at oneroyal.com and even access other free trading tools to improve your experience. The good thing about demo accounts is that they allow you to test your trading plan without risking real money.
This is very important because, according to Bloomberg, over 80% of day traders quit within just two years, often because they lacked a clear strategy. You don’t have to keep hopping from one strategy to another without a plan. Take advantage of demo accounts to get the ins and outs of different strategies before moving any further.
And never forget that consistency is king. Sometimes things can change rapidly, which may affect your emotions. But never allow the emotions to take the lead. It doesn’t matter the level of knowledge you have amassed or how good your trading plan is; sticking to your plan is the real deal.
Take advantage of market news
Something you will notice with most short-term traders is that they usually base their decisions on technical analysis and price charts, regardless of the market. Such traders often ignore fundamental factors like news releases and focus on price trends, support and resistance levels and so on.
But anyone who’s been trading for a while can agree that fundamental factors can greatly affect market trends. That means you may need to be acquainted with economic indicators like interest rates, a country’s retail income, inflation, etc. When trading on news, you can take advantage of market expectations before and after the announcement.
And mark you: some instances might need you to make quick decisions, especially when the market effect is immediate. In other cases, the news may already be factored into the asset price because traders often try to forecast the outcomes of future news. If you intend to participate in volatile markets like oil trading, the news-based trading strategy can really be helpful.
Avoid the following mistakes
Unrealistic expectations
One of the most common pitfalls, especially among new traders, is they determine success as traders. Because most of them usually enter the market with the notion of making huge returns, they always end up falling into the temptation of trading too much, too soon.
However, the downside to this approach is that it raises the level of risk. Remember, trading is more than mere guest work – you will need some good time to work on your skills, discipline and planning. Actually, most professionals will advise you not to treat trading as a night out at your favorite casino but as a long-term endeavor.
Avoiding to use a stop-loss order
Can you try to imagine the risk of driving a car without breaks? It is similar to trading without stop-loss levels. Even though it poses great risks, many newcomers still ignore this tool. And you can already guess the outcome for such traders – painful losses.
Stop-loss helps to prevent getting too deep into a losing position. You can either put a hard stop-loss when entering a trade or a soft one as you trade to better manage your risks. But always keep in mind that the soft stop-loss tool may be more appropriate for those who are quite advanced and have more experience.
Taking too big positions
We have already hinted at how many traders often enter trades with unrealistic expectations—this is not only limited to newbies but also experienced traders. So, there is always the temptation to think your trade will win big.
Unfortunately, you don’t always have the guarantee that the trade will go your way. Imagine risking a whole 50% of your capital in a single trade only for it to go against you. Consider learning some position sizing techniques to develop better ways of entering and exiting markets and managing risks.
If you pay critical attention to some of these tips, you can be sure to reduce the amount of frustration you can get as a trader. Of course, no one wants to keep losing their money just because they are ignorant and do not make the right decisions. But that means you have to be patient, educate yourself as much as possible and develop the necessary discipline.
