Best Newbie Trading Practices to Know
If you are a newbie to the world of trading than it is absolutely essential that you follow the right tips an rules in order to be successful. The simple fact of the matter is that trading is not easy in the least. Whether you are trading on the cryptocurrency market, the stock market, the Forex market, or anything in between, if you don’t follow the proper trading practices then chances are that you are going to lose all of your money.
There are many different trading practices that you need to know about, and all of which are equally important in order to keep you safe. Of course, the main point of trading for you is to help put money in your pocket while also minimizing risk. While the various newbie trading practices that we are here to talk about today will help you do both. These practices will help you make money while keeping your risk level at a low.
The problem is of course that many newbie traders think that trading is easy and they can just start doing it and make money on the first day. However, this definitely is not the case because it takes a whole lot of education, training and skill in order to be a successful trader of any kind. With the various trading practices that we are about to talk about, you should be able to make money on a consistent basis.
Best Trading Practices for Newbies
Right now we want to go over a list of the most important trading practices that you need to be aware of and that you need to adhere to. If you plan on being a consistent and successful trader.
Don’t Be Emotional
One of the best trading practices that you absolutely need to follow is that in no way, shape or form can you be an emotional trader. The simple reality here is that trading is all about logical thought and reasonable deduction. Trading is all about researching and analyzing the market in order to find the best possible trades.
Moreover, if you get a trade right and you win a lot of money, don’t get ahead of yourself and start investing huge sums into trades just because one went the right way.
On the other hand, if you lose a trade or if you lose several trades, don’t start getting emotional and reacting with a knee jerk style. There is no point in getting emotional if you lose a trade, you have to go back and analyze it to see what you did wrong. Your heart has absolutely no place in trading.
Don’t Take it Personally
Another one of the best trading practices that you need to follow is that you can’t take things personally, especially when you lose money. A lot of people out there think that their brokers or their trading platforms are out to get them by purposely causing them to lose trades. People, brokers and trading platforms make more money when you win trades and therefore, they have no reason to do so.
Nobody is out to get you. What you do need to be aware of here is that the market is rigged against you. The chances of you making money are a lot slimmer than you losing it. Therefore it is not only essential that you don’t take things personally and that you don’t trade emotionally, but also that you trade using the best possible analytic and research methods possible.
Don’t Go Telling Everybody
When it comes to the best trading practices out there, another recommendation that we have for you is to not tell everybody as soon as you start trading, especially if you are not making money. The fact of the matter is that as a beginner trader, everybody is going to be extremely cynical and skeptical of you. The number one question that everybody is going to ask you is if you have already made money.
However, of course if you are a newbie trader then chances are that you just haven’t made that much money yet, or that you even lost it. Being forced to tell everybody around you continuously that you are losing money is going to do nothing for you. All that is going to do is to SAP your motivation and your confidence and will most likely make you give up. Until you master trading and start making consistent profits, there is really no reason to divulge this info to others.
Don’t Start Trading Blindly
When it comes to the best trading practices for beginners, one of the most important ones for you to follow is to get an education first. Of course, in order to be a profitable trader you need to know all about charting solutions, indicators, trading platforms, fundamental analysis, technical analysis and so much more. The bottom line is that without a solid education, especially a good foundation of knowledge that you can then build upon, it is nearly impossible to make money.
There are just way too many moving parts and factors to consider when day trading for you not to do so with an education. There is just way too much to know, and if you don’t know it, you just aren’t going to make any money. Therefore, no matter what kind of trading you plan on engaging in weather day trading or swing trading, or whether you want to trade stocks, cryptocurrencies, or forex, the fact of the matter is that you absolutely need to go get yourself an education first. Don’t wake up one morning and just think that you can trade successfully. Life doesn’t work this way.
Remember Risk Management
In terms of the best trading practices out there, but especially when it comes to newbies, one of the most important things that you need to do is to engage in proper risk management techniques. More than anything else, this means that you should not risk more than 1% or 2% of your trading capital on a single trade. At the very most.
Simply put, if you risk all of your money in a single trade and that trade goes South, then you will lose all of your money. However, if you only invest 2% of your total capital into a single trade, even if you end up losing that trade, you won’t bottom out your account and you won’t make a big difference in terms of your bottom line.
The Best Beginner Trading Practices
When all has been said and done at the bottom line, here is that if you follow these beginner trading practices that we have talked about today, then your chances of becoming a consistently profitable trader increase drastically.
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