7 Tips to Become a Successful Trader

Have you ever thought about wanting to become a full time day trader? Maybe you are only interested in learning how to trade so you can maximize your investment. Whatever it is, to become a successful trader is not easy. You need financial capital to start, and a relatively strong mentality to bear the risk.but with proper planning and discipline, you can make money. Watch these 7 tips for becoming a successful trader.

1. Have a Plan

When talking about trading, it might not be the best idea to go straight in (buy shares).it's important to take the time to explain what you want to achieve and establish a set of rules that will allow you to achieve good profits and manage risk.

Your plan or trading plan must include rules about when to buy and when to sell. It also has to explain how much cash you allocate for each trade.if you don't have extra cash for trading, don't start until you have it. It would be wise to prioritize paying down debt and building an emergency fund before starting trading.

2. Test the strategy

Once you have a strategy and trading plan, then the next question is how do you know if it is a reasonable strategy? Fortunately there are ways to test trading strategies without putting money at risk.every investor and trader can use historical data to see how the strategy is implemented in actual trading.

Of course, this requires a lot of time and effort. In some cases, a trader can benefit by hiring a programmer to develop a backtesting system.some online brokers offer a platform that allows testing this strategy.

3. Take advantage of technology

Almost every investor and trader trades using an online platform today. And as stated above, it can be very helpful in testing potential strategies.but the use of the internet and technology doesn't stop there.

The smartphone application allows you to trade while traveling. Sophisticated stock charting software and websites allow you to analyze investments and market conditions. The bookkeeping application allows you to track the cost base to ensure proper tax accounting.abundant available technological tools, so take advantage.

4. Don't risk all your capital

Say you have enough funds to cover your living expenses, and now you still have 50 million in cash that you are willing to invest.

50 million is a good amount, but it can't be invested all at once.in fact, the rule of thumb is never to risk more than 1% of your money on any trade.that means that if you have 50 million invested, you should never allow yourself to lose more than 500 thousand rupiah on each trade.

Another sensible guideline is that if you have 50 million in a stock account, you must keep some of that money in cash. In this way, there is no chance that your capital will be completely destroyed.You will also have the money to pounce on any good stock purchase opportunities.

5. Read, read, read

In this day and age where information is easily obtained, it is easier to trade.there is no reason to trade that is not supported by a thorough analysis of the underlying investment, and broader economic and geopolitical trends that can affect performance.

Important readings for traders should include:
  • Financial documents, including balance sheets and annual reports
  • Report from analyst
  • Economic indicators
  • Technical analysis
  • Historical price data
  • Report on relevant trends
  • Daily financial news
  • A book about investments, secular trends and world events

The more you educate yourself and read about investing in the market, the smarter your trading will be.

6. Always Use Cold Money

Savvy investors will never invest money they cannot afford to risk losing. This means that you must have special funds for important expenses, such as payment for rent or higher education for children.You must also have an emergency fund to cover at least a few months of expenses if you suddenly find yourself without income.

These funds must be kept separate from the money you use for trading.when investing, there is always a risk that you might lose money, so you don't lose money on house payments or get owed because you use the money to trade stocks or bonds.

7. Keep calm

Have you ever wondered how robot advisors can make money for investors? That's because the robot advisor is designed to carry out strategy and stick to it, despite the ups and downs of the market every day. The robot advisor application has no feelings. He cannot be angry when the market falls and cannot be happy when the market goes up.

Investors play a long game.this means that they are not too worried when the value of the investment falls on a certain day, nor are they too excited when the value of the investment rises quickly.

It is indeed a difficult thing when we see the value of our portfolio is in a fairly large floating loss in a short time.but that is no reason to sell investments at a loss or make other ridiculous decisions.

As legendary investor Warren Buffett once said, "If you are going to do stupid things because a stock is down, then you cannot have any stock at all."

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