Wisdom About Improving Trading Results

If you are a newbie trader, then your focus is likely on improving your trading results period of course, everybody wants to improve their trading results. However, this is obviously easier said than done. What we’re here to do today is to provide you with various pieces of wisdom about improving your trading results.

We aren’t really going to be talking about trading strategies here, but rather very general tips that newbies seem to have no idea about. Let’s provide you with the pieces of information you need to help improve your trading results.

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Even Great Traders Have Rough Beginnings

Something that you need to be aware of your is the fact that most traders, even the great ones, struggled greatly in the beginning. When you first start trading, you are very likely to suffer losses period now, we aren’t saying that you are likely to suffer some minor losses.

What we are actually saying is that you are very likely to suffer heavy and consistent losses in the beginning. When you first start trading, you are going to make big mistakes, and they will lead to losses.

So, if most people suffer such heavy and consistent losses, and how do they actually become professional and successful traders? How do these people improve their trading results without throwing in the towel and quitting?

Well, to improve trading results, a lot of people start with a demo trading account. This allows them to trade under live market conditions without actually risking real money. This don’t stick with demo accounts for too long, because they don’t have any risk. If there is no risk present, then you won’t practice your risk management skills.

Once you feel confident to trade with a live account, you should start with something like $1000. However, you should treat those $1000 like they are $100,000. Then, as time goes on, and improve trading results, you could keep adding more money. Of course, risk management is key here, something we will discuss further below.

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Remember to Manage Your Trading Account

A huge mistake that all too many newbies make is to neglect to manage their trading accounts. Yes, managing your actual traits is a big deal, but you also need to manage your trading account. If you plan on improving your trading results, money management and risk management is very important.

Remember that you also need to adapt your money management practices to how well you are doing. You don’t need to use the same level of list management if you have endless funds compared to if you have just a few $1000 to trade with. Now, there are three main things that you can do in order to improve your trading results via good money management.

First off you always need to remember the 1% rule, which states that you should invest no more than 1% of your total trading capital into a single trade.

This means that if you have $100,000 to spare, you should risk no more than $1000 on a single trade. Do you remember that if you are doing very well, you can increase this to around 3%. However, if you are not doing well and suffering lots of losses, then you might want to decrease this to 0.5%.

You also want to pay attention to the amount of trades that you have open at once. For instance, if you’re trading on very short timeframes, it means you need to pay close attention to all of your open trades. This means that you should not have more than three or five trades open at once.

 Yet, if you are long term trading, and you have trades that will be open for days, weeks, or even months, then you don’t need to pay as much attention to individual trades on a consistent basis, which means that you can have 15 or 20 trades open at once.

The third rule in terms of money management that you need to follow is the 40% drawdown rule. This means that if you lose 40% of your total trading capital, then you really need to take a step back from things to look at what is going wrong. If you have already lost 40% of your total capital, then continuing to trade in the same manner is not going to get you anywhere but in an even bigger hole.

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Knowing Your Exit Strategy Before You Enter a Trade

There are three things that you need to know before you enter and trade. You need to know how to exit a trade when you were right. You need to know how to exit a trade when you were wrong, and you also need to know when to enter a trade when all of your criteria are met, and on the side note, you do of course need to know what these criteria are.

If you have the answers to all three of these questions before you place a trade, then improving your trading results should not be too difficult. However, if you don’t know the answers to these questions, and you are already in the middle of trading, and you have a serious problem on your hands. The fact of the matter is that ultimately people know when they want to enter a trade, they have no clue how to get out of those trades.

To master exiting a trade, we definitely recommend researching some proven and time tested trading strategies that tell you exactly how and when to exit a trade. If you want to improve your trading results, then you need to have the right strategies under your belt that allow you to both exit and enter trades when the time is best. If you are consistent with your trading strategies, then improving your trading results should not be too difficult.

Improving Your Trading Results – Final Thoughts

The other note that we want to leave you with for today is the fact that if you have already lasted for single year, then you are well on your way to success. The fact of the matter is that even if you have been losing trades and have lost money overall, if you lost for a full year, it means that you are doing something right, so don’t give up just yet.

If you’ve been trading for a full year and haven’t blown your trading account yet, it does mean that you are on the right track. If you have been trading for a full year and haven’t given up yet, then improving your trading results is the only thing that you can possibly do.

Now, of course, it does pay to know what you are doing, so we recommend getting yourself some kind of trading education. Being successful trader and improving trading results all starts with a foundation of knowledge that will allow you to win trades.

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For more trading tips, strategies, methods, and everything in between, check out Andrew’s Trading Channel. Here you will find the world’s best stock market trading school, a trusted day trading school, state of the art indicators and trading tools, Forex and crypto signals groups, and more! 

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