Do you have a trading strategy? If not, then this article is for you.
A trading strategy is your step to success as not just a forex trader, but also any trader. Finding stock market tips to create your system is a good starting point, but it goes deeper than that.
We created a list of 10 ways to build your trading strategy.
1. Use a Reliable Trading Platform
Your trading platform can make or break your trading success. Not every platform is made the same, just like not every trading style is the same. Find a broker that offers a legitimate and reliable trading platform (check out the top ECN brokers of 2020).
2. Start With a Demo Account
Using a demo account isn’t just for beginner traders. A demo account also allows you to test out any new trading strategies you have. Although using a demo account versus trading in real life are two different worlds, it’s still an excellent starting point for any trader level.
3. Prepare Yourself Mentally
Trading does take skill, which requires mental preparation. If you’re not in the right mental space for trading, you risk losing virtually everything. It’s easy to get into the “just one more trade” mentality to win everything back. That is when traders dig themselves a deep hole that is difficult to climb out of.
The point is – make sure you get a good night’s sleep and that you’re in the right headspace for your day of trading.
4. Set Your Risk Level
Every smart trader has a risk level they work with. This risk level is what you could handle is you lost at any point. Setting a realistic risk level allows you to protect your finances as much as possible, so you don’t lose everything.
5. Use Regulated Platforms and Brokers
It’s tempting to go for the platform and broker that has the cheapest fees. However, do you know if the company is regulated? Saving a few bucks per trade isn’t worth the risk of the broker isn’t regulated.
Before joining anything, check the regulations around the platform and broker. Their website and reviews will tell the story (read this article to determine if the popular broker BDSwiss is regulated).
6. Set Yourself Goals
Goals are an essential step in any trading strategy. When you set goals, it provides a roadmap of where you want to go with your trading and how you’ll get there.
7. Always Do Your Research
A tip for any trading strategy is always to do your research. Although you can never fully prepare for what the market will do, you can prepare yourself as much as possible. Follow the market news to get yourself ready for the next trading day.
You can also check: Top 15 Best Trading Apps in India 2020 for online Stock Trading
8. Have an Exit Strategy
Traders don’t want this to happen, but it’s essential to have an exit strategy. Not every day will be a good trading day. You risk losing everything if you don’t have a strategy set for getting out of your trade to minimize your loss.
9. Keep Records
An experienced trader will likely tell you to keep a record of your trades, whether you win or lose. These records reveal a story of success or failure that the trader can learn from.
10. Analyze Your Day
Before wrapping up your trading day, spend some time analyzing your data. What worked and what didn’t work? What did you learn for next time to avoid another loss? Consider it part of your research for your next trading day.