10 Tips To Become A Profitable Trader

psychology Mar 21, 2024

There are many tips all across the internet that can be broken into subcategories in their own merit. However, these are the top ten things any trader should stick to when it comes to trading.

HAVE A PLAN – List ground rules of how you plan to trade. Plans can be created through various online sources that resonate with you or by adapting to an already established plan. A standard method should at least include: when to enter and exit a trade, management of a trade and risk allocation. Don’t place a trade without reason – otherwise, you’re gambling!
STICK TO YOUR PLAN – Don’t throw out your plan because your friend that just got into trading had one month of successful results. At this point you already established a successful trading plan, now stick with it! Altering your stop losses, increasing risk size, or altering your management can be detrimental to your overall journey. Stick to your plan!
DON’T STRESS – Once you have a concrete strategy that has been tested time and time again through proper backtesting, there’s no need to stress. Trading should be an enhancing aspect of life rather than a disempowering and stressful one. What type of trader are you? Choose a style that fits your schedule and strategy. Let the market move into your positions effortlessly.
TRADING IS A BUSINESS – As with all businesses, create documents of your plan in an organized way and write down everything. This includes losses, wins, withdrawals, deposits, fees, and trades – create a journal. In regards to trades, think of losses as “expenses” or the cost of doing business, it will always be apart of trading. The more information you gather for every action you commit on your account, the easier it is to find things you can tweak in the future.
KEEP EMOTIONS IN CHECK – It’s difficult to be neutral when a trade is running nicely and even more difficult when a trade is going against you. The emotional swings of being a trader are redundant amongst all successful traders. The difference is successful traders don’t apply emotions to a trading session. Be wary of revenge trading and fear of missing out. Remember it’s a marathon, not a sprint. There’s no need to force trades.
SET GOALS – Instead of thinking cash terms think percentage returns. Making dollar goals could lead to reckless actions like overtrading or not letting your strategy play out. Keep it simple, not complex. Goals like backtesting a pair, going over past trades for the week, clearing your charts, etc. Goals should be easy to maintain. Setting goals and accomplishing them have a great psychological benefit when it comes to confidence in trading.
BE CONFIDENT – There’s a fine line between keeping emotions in check and applying confidence to your trading. Confidence in this aspect means having security in your strategy and knowing you can make profits, through the losses. You need to trust your plan, trust yourself, and be confident enough to place a trade – there are limitless possibilities in the market.
BE A LEARNER – Every loss and win has its value. There is still something to be learned in the market. Some questions to ask yourself: “Did I apply emotion while trading? Could I have captured a bigger move? Am I allowing my strategy to play out? Did the trade go as I planned?” and the reason why. This also means educating yourself with the correct answer if you don’t have one. Read books and other legitimate articles to educate yourself in the market. Set times a day to study and perform weekly monthly and annual reviews.
HAVE A ROUTINE – Sticking to a daily routine carries over into trading through discipline. Wake up at a particular time every day. Workout at the correct times. Eating at specific intervals and setting appropriate sleep times are the basics of having a successful routine. Without becoming too mundane, spice up your routine to have a fresh mindset that’s ready to dominate the market.
REST – Take a break. Don’t forget to relax. Your brain, body, and account will thank you. Opportunities will always be in the market so it’s important to know when to stop. Do things to help induce relaxing – this could be yoga, mediation, warm baths, a walk in the park. Even on busy days, a quick breath of fresh air can refocus and recenter you. It’s good to incorporate rest periods within your daily routine. Taking breaks is intricate to success.

Applying these top tips for trading will help you progress quickly in your trading journey. The best thing about these points is that everyone can continually refine and retweak themselves. There is and always will be something to learn about yourself or the market.

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