Trading | 6 months ago
Trading can be uncertain and stressful at the best of times. Many beginners think that trading is a get rich quick scheme. However, this is far from the reality. In this article we will discuss the top 5 rules for successful trading which will increase your probability of successful trades.
Rule 1 - Invest time in solid trading education
Your investment of time and effort in trading education will benefit you enormously. Keep educating yourself on topics related to trading financial instrument. All of this knowledge will improve your trading performance.
Rule 2 – Practice in demo trading account before trading in a real account
Whatever you have learned theoretically, you must practice it using a demo trading account so that you don't have to lose any money even if you make mistakes. This practice will improve your trading skills. Once you are able to trade successfully in demo account, you can gradually move to a real account.
Rule 3 - Create a strategy
Before placing any new trade, you must have a strategy in your mind. It's even better if you have that strategy written on a piece of paper or saved in your notepad. Make sure that strategy is based on facts and your practice.
Rule 4 - Small position size
A small position size allows trader to judge their decision. You should risk a maximum of 2% to 3% of your account on a single trade. The main objective of small position size is to preserve your capital so that you can always be in the trading. The second objective is to prevent any huge loss from which you can never recover.
Rule 5 - Avoid emotional trading
Make sure you are making an informed and rational decision when trading. If your trading plan has failed for that particular trade due to any reason, then you should not do any sort of revenge trading. Just stay unemotional.
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