Tag: FX

4 must to do things traders should follow while trading

Trading can be seen as a sea of opportunity waiting to be explored. Nevertheless, traders who are not adequately ready to board on this adventure may find sinking instead of swimming. Just as the ship captain needs a map to navigate their ship’s path, traders need some strategies

and plan to lead them through their trades. We as a human don’t have any idea what is next? We don’t know whether there is any life going to exist or not? But, the human being has the capability to face the improbability of the future with curiosity and positivity. There is hope, the hope of living, hope of having a happy life and we make plans for our future and work on that to have one.
Similarly, traders cannot predict their next trade but still, the next step should be planned and strategized. The experienced traders already know that having a trading plan is essential for long term success.
What about you? Are you not aware of what is a trading plan entails? Let’s have look at some key points which are included in a trading plan to get started;


Goals
Take a moment to analyze your both short term and long-term goals before starting your trading day. Ask yourself which one you are about to achieve, and which one may need a bit of change. Are your profits realistic? Have you evaluated risk or reward ratios?
A trader’s success depends upon his goals, so it’s essential to reserve some time to think about your trades carefully.


Instruments to trade
Trading instruments generally refer to the different types of markets you can trade. Sometimes, it is called securities, they vary from commodity futures to stocks and CFDs, to currencies and metals and many more. So, choose the instrument you want to trade after studying the market.


Trading times
Time can be critical depending upon the instrument you intend to trade. For example, forex traders might want to isolate the times when the market is most active. When the market is highly active it usually translates into volatility, which increases upside potential.
Trading generally also depends upon mood. If you feel refreshed and energized in the morning it could the best session, if not, you can try the afternoon or evening sessions.


Entry/Exit rules
This is the place where your trading strategies and plans come into play. Make sure the strategy that you want to employ is compatible with the instrument you have chosen to trade. Plan the entry signals you will look for, and form potential exits. It may be brilliant to use the two exit rules: the first should be your stop loss (LS), and second should be your take profit (TP). The creation of these signals prevents you from being a victim to the emotional trading.

Why do traders keep losing money in Forex Trading?

To be honest, getting consistent returns as a trader is not easy. Around 90% of people who have entered the financial markets lose money and leave empty-handed. There are lots of reasons for losing money. For example, some people are not that serious about their trades, and they just do it like playing a game, others take it as entertainment and not as hard work, the rest feel lazy to gain knowledge and acquire new skills.

So, why do you keep losing money? Your answers are below;

Being ‘too smart’

Being too smart is hardly the reason that makes you keep losing money. Nevertheless, it is the brilliant investors who are more successful in the financial markets. If you think you are too smart, on the contrary, it could get unpleasant.

Now, what do most ‘smart traders’ do? The smart traders believe that they can defeat the market, which is not easy and happens pretty rarely. They believe that it depends upon luck and not the skill. Most of the traders enter the deal at the least suitable time and end up with a position that is intended to lose.

Very less people out there can brag the ability to be smart with the market. One stay humble, trade with the trend and don’t act over smart while going against the market rather you should embrace it. You should rather embrace it instead of beating and going against it.

Being emotional

Trading cant’ be considered as your life. Here one needs avoid both positive and negative emotions as they can hamper trading progress. Try to stay relaxed and patient. It will help you in your next trading.

No risk management

One can bet his entire investment on a single trade and may even earn some profits. But, after a few more trades, he will eventually end up having massive losses. Unlike those traders who follow proper risk and money management & as a result lose just few shares of their investment, you can lose the entire capital at the moment. No more funds equals to no more trading.

Conventional investors suggests that one should risk just 2% of his trading equity on a single trade. Go for 4-6% if you really feel lucky, but under no conditions assign 100% of your funds to even “the deal that will make you win for sure”.

Controlling your emotions place a big role while trading, as said by warren buffett -“If you cannot control your emotions you cannot control your money”.

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