Being a successful trader can be quite profitable, so it is not hard to understand why more and more people start doing that. However, trying your luck on the market is not always a simple task. There are many things that you need to learn before you become a trader.
The secret for success is different for each person, but we managed to come up with some tips that should help you get started. If you want to have successful trades, take a look at what we have prepared below.
1. Find the right broker
It is very important to choose a broker that is there to meet your needs. You want someone who is able to offer you the trading platform that you want. You need to find a person that has a good reputation, and luckily for you, you can find trusted forex broker online. Nevertheless, before you make a choice you should find out about the policies of each broker.
2. Use the resources available
Since we live in the era of technology, it is very simple to access the information you need and gain access to any tools. There are many websites that can help you with trading, and you can find the data that you need online, from calculators to s&p 500 live chart index.
3. Decide what your entry and exit time frame will be
It is very important that you learn how to synchronize time frames. For example, you should make sure that you match your weekly chart and your daily chart. If your weekly chart is telling you that it is a good time to buy you should also wait until the daily chart offers you the same signal.
4. Calculate expectancy
If you want to find out whether your system is reliable you will need to calculate your expectancy. In order to do that, you will need to analyze your trading history and compare the wins and losses. This way you can see what your actual profit was.
Start by taking a look at your last ten trades. Calculate whether you have made a profit or a loss and write down all the results, then do the math. The formula you should use for this is E= [1+ (W/L)] x P – 1, where W = Average Winning Trade, L = Average Losing Trade, P = Percentage Win Ratio.
5. Weekend analysis
During the weekend the markets are closed and this can be the perfect moment to stop and take a look at the market. Analyze weekly charts and try to find patterns that might influence your trade. By doing this you will be able to come up with a plan for the upcoming trade week.
Choose a trading style that works for you
Most amateur traders want to use multiple trading styles, but this is not recommended. You should pick a trading style that matches your personality and your goals, and then stick to it until you master it. That is because each trading style is different and they all require different approaches.
For certain persons, day trading might feel safer, while others believe that becoming a position trader is more profitable. It is up to you to decide which trading style fits you better. Just make sure that you choose it carefully.