Tips from My Trading Days
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I have had a few years in which I was trading independently and have gathered a few tips that I would be happy to share with you.
Tip #1: TAKE YOUR TIME
It takes time to learn what type of trader you are.
I think that in order to trade successfully you need to understand the type of trader you are. What does it do to you when you have open trades? Are you anxious or relaxed, detached or emotionally involved? It takes time to figure that out.
So, my first suggestion is to trade in the practice mode for a while but take it seriously, as if it was your own money. Do your best to think of that money as what you have. Open the trades and try to follow them and gauge your reaction when prices go up or down. I know it is hard because it is practice but try to get into it. Open similar positions to the ones you would in real trading just to get the hang of it. It might be ten times higher because of the gold account status but still. This will tell you how you are in regards to trading. Does it excite you or bore you? Are you rash or cool-headed? Do you imagine things large, do you have plans or just think of the grass outside?
Tip #2: At the beginning, at least, focus on one instrument
Every instrument behaves a bit differently, not only in terms of the minimums you can invest in, but in general trading rules. Some are much more volatile than others. Choose one that you have a connection with. Maybe you understand the economies, have an uncle that invests in it, etc. Take your time familiarizing yourself with it so you can get a sense of how it might move next. Study the charts and recognize repeating patterns. This will enable you to trade confidently.
Tip #3: What time frame suits you best?
Knowing how we trade will allow us to gain more insight to the time frame of trade that will suit you, i.e., minutes, hours, days, weeks, etc. It depends on your attitude and decision making. If you are quick on your fingers, you might want to trade in the minutes time frame. If you prefer longer positions then hours and days are yours. If you are bored of this then probably copying some traders would do the trick.
This will derive the way you trade; small amounts with large leverages or the opposite depending on the time frame. You would need flexible stop losses for long trades and can do with shorter ones for short term trading. Try to keep tabs on what works and what doesn’t.
Tip #4: Stay in shape!
The thing is, trading is about staying fit. Feeling the market and moving sometimes on reflex. For that you need time and patience. Trading needs a long time to understand how the markets move and how they react to certain occurrences. Whenever I stopped trading for a while I needed to take a few days to go back and understand what was going on. Try to follow your chosen market/instrument, even 10 to 20 minutes a day, just to see how its day went. It’s important because it will again help you with your trading feelings and keep you updated with future events and trading opportunities.
Tip #5: The Son, the Father and the Grandfather – History
It’s important to understand where you are in several time frames to understand the general mood of your instrument. If you watch a chart in minutes, you don’t know the larger trend the instrument is heading at. It is always good to analyze the instrument for key rates which draw a lot of attention. If you are in minutes chart and draw near a major rate that draws a lot of attention, you might be heading into a volatile storm and you would only see it in a larger time frame. Know the currency’s history.
Tip #6: Find a system
One of the risks in trading is to fall in love with trades and opportunities. Remember this: There are always opportunities. Try to work on a system that will help you keep your emotions separate from the trades, just to keep yourself in check. Even something simple would do the trick. There are a lot of indicators out there to play with, try to know 2-4, nothing too fancy.
That’s it from me for now. Open your ears and eyes to opportunities and dangers. Trade wisely and share your thoughts all the time, to get feedback from others in the community. Any and every trader might be the one to provide you with some enlightenment about something you hadn’t previously thought of.
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