9 Golden Rules to Become a Profitable Trader
Are you tired of losing money in the stock market? Then these 9 golden rules can help you to become profitable in trading.
Cut Losses Fast
As a rule of thumb, you should aim to end your trade in one of four ways: Big Win, Small Win, Small Loss, or Beak Even. Avoid big losses at any cost.
Follow The Market Trend
Identify the market structure and follow the trend. If the trend is negative, don't look for buy trades. Going against the market trend can lead to unnecessary losses.
Plan Your Trades
Before executing a trade, Identify the market conditions and potential risks-rewards. Set realistic profit targets and stick to your plan, when emotions come into play.
Value Price Before Fundamentals
As a day or swing trader, you should prioritize price action over fundamentals, news, and opinion. Price is a leading indicator that often moves before anything else
Be Realistic, Not Rational
Don't aim to double your money every month or quarter. Setting realistic profit targets, such as 4% to 5% per month, can help you achieve consistent results over time.
Risk-reward ratio makes all the difference in trading. Take only those trades that have a minimum Risk-Reward of 1:2. With this you can become profitable even with 50% accuracy,
Avoid Averaging Down
The biggest mistake traders make is averaging down on a losing trade. This strategy can lead to big losses, so you have to know where to stop and cut the losses.
Protect Your Profits
When you are in good profits, book part profits on a regular basis. Use trailing stop-loss orders to lock them in
Goal of trading is to enough money to live life on your terms, get more time and freedom - not to lose everything. So you have to know where to stop and close your trading terminal.
Peace comes first, and money comes later.
Trading is a long-term game, and you have to survive first because you are just 2 clicks away from losing all your hard earn money.