Millions of people are drawn to the financial markets in the pursuit of financial freedom, but unfortunately it is a simple fact that the most of the retail traders lose their trading capital by trading incorrectly. Traders experience highs when they see even a small gain – they feel like they are on top of the world and think that you have beaten the market. However, the circumstances can change very quickly – within the next minute. Therefore it is important to target long-term returns instead of short-term gains in order to achieve sustainable and consistent profits. Here are some of the tips to help you along the way.
Keep track of everything and journal your trades
It is of paramount importance for each trader to track their trades. This can be done manually, although most of the popular trading platforms provide automatic systems which are very useful. You need to understand the markets that you are interested in, and it is important to include thoughts and observations within a trading journal. This exercise will be extremely useful in terms of tracking performance. You need to monitor your entry price, your exit price, your profit / loss in each instance, the logic behind the trade to begin with, and your actual feeling upon entry and exit.
Consider trading as a business
Trading should not be treated as something which can be successful without education. Just because someone might want to be a trader does not guarantee success – no different than simply wanting to be a dentist guarantees success. People achieve their desired results through education – through following others who are successful. If you want to become a successful trader and target a consistent long-term profit, then you need to study your competition, you need to put in some effort and time because it is not easy, no matter what commentators and “tipsters” say.
Enhance your expertise when using a method of analysis
You need to find a competitive edge. We recommend using technical analysis. When applied correctly, technical analysis can provide precise entry and exit points. It does not require you to be subjective – it does not rely on your opinion. It should provide you with an unambiguous signal. This is particularly useful to those who have no economic and finance background. Mastering technical analysis and specific strategic methods will help you achieve your goals.