Technical analysis : For traders - 1.2 - Trading rules

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(Edited)

The first thing every one should understand that trading is much more risky compared to investment.

Again where risk is more, reward I is also more attractive. Its definitely a quick way to make done money.

Only 10 % of traders make money on the market, because they stick to some basic rules.

Rules are highly important in our life to safe guard from any distraction. Same applies to trading too.

So let's discuss the rules one by one now :
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  1. Don't leverage :

Most of the broker provide leverage for intra day trading. Means you can grade for 1000 buck with only 100 in your account, in case your broker gives you a leverage of 10X.

Though they can be used to quick, still are very dangerous.

As A newbie, only grade with your own money. So even if you trapped in a wrong trade, loss will be minimized.

  1. Have A plan on hand

Your every entry and exit of a trade should be decided some factors.

Promise yourself not to deviate from your plan. Mostly people try to average in a losing trade and go out of the winning trade much before.

So while winning, they make less profit. But in a losing trade, they loss much more.

There nothing like luck in trading community, its ask about the skills, timing and plan.

  1. Once you are done, leave the terminal

In my initial time, I used to earn very good in first couple of hours. But at the end of the day my total balance sheet used to go into negative.

Because after some winning trade, confidence goes up. We start believing on luck and takes the advantages of leverage.

It happens to everybody. Special someone who starts trading.

So have a target, after earning that much much money, just stop. Go away from the trading terminal.

  1. Learn everyday

You need to learn everyday. Try learning different candle patterns, indicators. Do back testing on a stock, learn how the stock reacted to the perticular pattern in past.Screenshot_2019-11-13-13-12-24-649_splendid.logomaker.designer.png

Watch financial news channel, see what is happening globally. Because entire stock market react very strongly to any deviation to other currencies too. Usually USD is very powerful currency, which can manipulate the index.

  1. Don't revenge on a stock

If you have some loss in a perticular stock, don't try to revenge on that. Just leave that stock for dinner time and wait for the perfect entry.

This happens to most of the people. But avoid this. Make a rule and stick to this.



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