Top Trading Practices to Make Money
If you are planning on becoming a profitable day trader or swing trader, then there are a variety of trading practices that you absolutely need to follow to make money. The simple fact of the matter is that there are many different trading practices that professionals always follow in order to remain consistent and profitable. If you don’t follow the trading practices that we are going to talk about today, then your chances of making profits are very minimal. Let’s get right to it and talk about the very best top trading practices to make money that you, as a beginner need to master and adhere to.
Top Trading Practices for Beginners
Here we have quite the list of trading practices that you, as a beginner need to follow so you can make money on a consistent basis. Remember, the point here is not only to make a lot of money, but also to have minimal risk when trading.
Don’t Go Blabbing When You First Start
One of the biggest mistakes that newbie traders seem to make when they first start trading is that they will tell everybody and anybody who will listen about their experiences. People when it comes to the best trading practices out there, the best traders, especially when they first start out, don’t tell anybody what they’re doing. Now, the reason for this is not because trading is bad, or because it should be secretive, but because telling everybody around you could sap your motivation to trade.
The fact of the matter is that the first question that everybody is going to ask you here is whether or not you are making money. On the off chance that you are making money, then sure you can tell them, but the reality is that as a newbie trader, you probably aren’t making any money. Continuously telling people that you are not currently profiting is going to do nothing for you, but take away your motivation and your confidence to trade. When you first start trading, there is just no point in informing the world around you.
When it comes to the very best trading practices out there, as a newbie trader, something that you absolutely need to do is to start with a small trading account. Sure, you might have $100,000 laying around to trade with, but the fact of the matter is that as a newbie trader, you really don’t want to use that much money anyway.
There is no point in risking 10s of thousands of dollars in trading when you really don’t know what you are doing. Moreover, large trading accounts that allow you to trade with so much money aren’t cheap. Those accounts charge high fees and commissions for their services and it’s just not worth it when you are starting out and practicing. Therefore we recommend first starting off with a very small trading account.
Get a Good Education
When it comes to trading practices that you absolutely need to know about, getting a good trading education is perhaps the best of all. The simple reality is that trading is not easy. Whether you are day trading or swing trading, and whether you are trading the stock market cryptocurrencies of forex, commodities or anything in between, the reality is that there are a lot of aspects, factors and moving parts that you need to know about and keep track of at all times.
You need to know how to analyze the market with both fundamental and technical analysis. You also need to know how to use trading platforms, how to read charts, and how to use indicators. If you don’t know how to do all of these things in quite some detail, then chances are that you are going to lose all of the money that you invest. Therefore, one of the best trading practices out there is to get a solid education and a good foundation of knowledge before you ever start trading to begin with.
Don’t Take Things Personally or Get Emotional
In terms of the very best trading practices that all professional traders follow, one of the things that you need to master is to put your emotions aside and to not take things personally. Some newbie traders, after they lose a few trades think that their broker or trading platform is out to get them. The reality here is that brokers and trading platforms actually make more money when you profit, so there is no point in them trying to take your money for nothing. The sad reality is that the market in general is rigged and it’s out to get you like a carnival game.
However, this is just the nature of the market and it is nothing conscious. Therefore you need to avoid getting emotional, reacting emotionally to both. Winning and losing trades is not a good thing. If you react emotionally to winning trades, you might get overconfident and end up losing all of your money because you take on too much risk. However, if you react emotionally to losing trades, you might end up making bad decisions that will cause you to lose even more money. Treating no matter the case is all about logical thought and rational decision making.
Always Practice Risk Management
If you plan on following the best trading practices out there and there is only one practice that you are willing to follow, then risk management is definitely it. The fact of the matter is that putting all of your marbles in one basket and risking way too much of your total capital on a single trade is one of the biggest mistakes that you could ever make.
The recommendation here is that you never trade with more than 1% or 2% at most of your total capital. In other words, if you have $10,000, don’t invest more than $200 into a single trade. This way, even if the trade ends up going South, you won’t end up losing all that much money.
Best Trading Practices for Success
At the end of the day, if you pay attention to the five trading practices that we talked about today, your time as a trader should be much easier and more successful.
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