This is a guest post by Paul Koger, founder of Foxytrades Swing Trading Blog
Warren Buffett once said, “The stock market is a device for transferring money from the impatient to the patient”. This applies to both – traders and investors alike.
However, if you are an absolute beginner, there is always some room for improvement. We have listed below the 10 best trading tips that successful traders follow. Learn them mindfully and take note to level up your trading.
This is why rookie traders often look for advice from experts who have carved their names in the industry. Read on to find out what you may require before venturing in this high-risk but ultimately-rewarding industry.
1. Learn from a Professional Trader
It is always better to learn to trade from an expert before you jump directly into the ocean. Try and find out who has a good teaching methodology and carefully choose the one that suits your style.
Most of the trainers or masters will definitely charge a fee for the time spared. Don’t you worry! It is no fee. It is called investment. After all, you are a trader and one day when you have made it big, you may be approached by newbies and you likewise charge them. But most importantly, if you invest into education, you are saving on market tuition from learning the lessons the hard way, on the expense of your account balance.
2. Pay Attention to the Financial News
Want to be the best trader around? Keep a close eye on the world around you especially business news. Stay updated about firms entangled in IP issues, Failed FDA nod, Board reshuffle, International projects, and dismal earnings estimates of the quarter. Every news related to the firm you are making an investment in makes sense. Back your decision with these inputs. For a smarter decision while trading, keep abreast of every piece of information on your preferred investment firm.
3. Found Your Niche? Ace It!
Nobody can guarantee you a blockbuster return. You make your own choices and decisions and learn from your mistakes. Only you know which strategies or niches worked for you and which don’t. If you really have the zeal to excel in day trading, you need to be right on top of your business.
Once you have found the niche to work upon, become really good at that. Master it and it will enhance your odds of success in the trading manifold.
4. Treat it like a Business!
Have a hobby? Pursue it somewhere else. Making money and day trading is a serious business. You don’t do it for fun so even before you start to trade, you need to settle with the fact that it is a serious, time-consuming business and it will take time to break even. If you want to gamble, Las Vegas might have better odds.
5. Follow the Pros
Julius Caesar once said, “Experience is the teacher of all things”. Trading experts, despite their level of training, have a lot to boast, thanks to experience.
Follow the moves of the pros and find out what are they investing in? When do they buy? When do they sell? For how long do they hold? Try and understand how profit is made. You can learn a great deal from the mistakes they once made and then harness them to your advantage.
6. Have Patience
Rome was not built in a day. It takes time to master any skill and the same goes with stock trading. It can give you the best returns only if you trade wisely. Researchers have shown that those who trade less tend to earn better than the one who trade very frequently. This is just like stalking your prey and then striking when you have absolute chances of success. Always remember that when you trade in average and not-so-good setups, you lose on good deals and eventually your profits take a hit. Therefore, one crucial day trading tip is that quality matters over quantity.
7. Don’t be Emotional
The world of trading calls that you keep a level mind and remember that if you let your emotions get the better of you while trading, you will most likely lose out on your money. Emotions make you take irrational, impulsive decisions which should never happen.
Frequent errors like letting your losses get out of proportion, adding to a losing position, not making timely withdrawals et cetera are made time and again. People fall into the emotional trap and make unconsidered decisions. And while you cannot help having them, learning to control your emotions will go a long way in positioning you as a shrewd trader. Work on the emotional quotient and you’ll make wiser decisions.
8. Sharing is Caring
Now that you have learned from your mistakes and other’s as well, it is time to share. You must share the experience you had while trading. You can start a blog, a Youtube channel or other medium for reaching out. You can have a comment section for answering the questions of your visitors. This will not only help others but will certainly keep you disciplined. This habit will make you more accountable and you might think twice before making a trade you know, you should not be making.
9. When There Are No Good Plays, Don’t Trade!
What? Do not be shocked as this is no less a practical tip than the rest. Sometimes it is good that you don’t trade. Trading just for the mere fact is not a smart choice.
Trade only when you see money lying on the floor or the offer is too lucrative to let it go. Take your chances and remember that this is a highly dynamic world so weigh all possible benefits of making a move against sitting back and speculating.
10. Have Confidence.
As obvious as it may sound, this is a key component of a refined trader. Whichever trading style you choose, you got to believe in yourself as failure to believe in the efforts you are putting or the decisions you are taking will never make you a winner. I might sound strange but people do not get good returns just because they cannot believe they will. This negative thinking results in negative returns.
Remember! Successful traders were also amateurs and novices when they started out. Their success has come from the hard work and efforts they have put in. Make mistakes and learn from them to continue trading until you start making profits.
As mentioned in the beginning, these day trading tips shared will let you learn some important hacks to improve Your game. Apply these diligently and you are sure to advance in your endeavors.
Good luck with your trading ventures!