Newcomers to trading have a misconception about the lives of those who often gamble on the stock exchange. It seems to them that it is enough to “learn” to predict the market movements of a trading asset and they can already make a fortune on this. In fact, the trader’s path to excellence is very thorny. These five tips will help you try to pass it.
Trade only with the money you can lose
More specifically, you can only trade with money that you can afford to lose. For beginners, this is especially important, because they are 100 percent likely to lose part of their capital (or even all of their capital) in their first trade orders – that is, operations on the exchange. Treat such losses as “tuition fees”. What does it mean? The trader should be clear about how much he can afford to lose this month, day, or on a particular trade. That is, no loans for trading.
Find the correct position size. This advice is addressed to those who want to make money with scalping. The exchange processes your orders for a certain fee – a commission. In some cases, the commission for scalpers can exceed their profits. Take this into account so as not to go negative.
Develop a plan and follow it
Each trader should have his own strategy, formed on the basis of theory and personal experience. Without an action plan, mindlessly opening orders would only empty your deposit. Also read about the use of technical indicators, they very often help to anticipate a sharp rise or fall in the price of an asset.
Keep a diary
A list of trades that you have made in the past will come in handy. Based on this data, you can analyze your own mistakes in order to prevent them from happening again. The exchanges have a history of open orders, but if you are trading on different platforms at the same time, it will be useful to have a large Excel spreadsheet.
Compare your results
You need to compare not with others, but with yourself. For example, calculate how much money you could gain or lose if you simply invested in a coin and held it. If you manage to make a plus with the help of trading, then everything is fine.