As you already know, trading is not always easy — it can be complicated, risky and controversial, even when you do everything right. When you feel down and distracted, strive to achieve balance. But how does one combine elements that, at first glance, seem opposite? Here is a brief guide on how to maintain yourself and stay calm and act rationally, even in the midst of a trading turmoil.
1. You can never know for sure…
One of the golden rules of trading is that you should invest only the amount that you are comfortable with losing. Why is that? Because no one can predict the future and make a 100% profitable investment. Of course, sometimes you can go through a winning spree. However, you should never expect that all of your deals will be in the money. Sometimes you gain, sometimes you lose — that is a big part of what trading is. There is no certainty and no one can guarantee you amazing returns.
2. But you need to do your best
It is true that the global financial market is hard to predict. But who said that you cannot learn to analyze it and make sound forecasts? Yes, you absolutely can. Markets go up and down in cycles and this is where a trading plan and good strategies come in handy. Go through materials you find online, read books and take your time with it. Do not hurry, decide on your approach, look at the economical calendars, try technical analysis — do everything it takes to make a correct prediction.
3. Talk and listen to other investors…
Market influences the prevailing sentiment generated by traders. Traders, in turn, influence the market by opening put and call positions. Their influence is interconnected and the opinion of people matters. At any moment of time, there is a group of traders (though, it is not always numerous) who is right about the future price. Therefore, it is important to watch what traders do and try to spot those who can boast a deep understanding of the current conditions. Group chats may help you understand the sentiment, and if you are after data — volume indicators can come in handy.
4. But do not let others throw you off your path
The market is a zero-sum game. That’s why you should always remember that other traders may want to see you fail. And some people out there live off your mistakes. Don’t let others take advantage of you. Beware of scammers and double-check the information you are being provided. Trust your own trading techniques and do not doubt your own abilities.
5. Treat it seriously…
If you want to see you trading improve, you have to be consistent. It is better to eliminate the word <game> from your vocabulary and start treating trading as a business. There is a lot of work to be done before you see progress. A good trader is the one who follows the plan. Make sure you know what your goal is and stick to the plan, it will help you during the times when you feel like giving up.
6. And know when to stop
Do not get carried away. Know how to manage your losses, read more about risk management and protect your trading capital. Always consider using stop-loss orders and try to keep your emotions at bay. You would not go to work if you are feeling tired, sick or unstable. So it is better to avoid making serious trading decisions when you know you are incapable of an objective evaluation of the situation. Patience and realistic approach are key for gradual development.Trade now