New Year is not only about presents, family reunions and warm wishes, it is also that time of the year when you give yourself a promise to improve yourself and get better over the next 12 months. In other words, it is time to make your own trading resolution. What new traits, skills and habits you want to acquire in 2019? We’ve made a list of 5 things you may seek to learn/improve in the coming year.
1. Trading Journal
Start a trading journal. A trading journal is a collection of all relevant information on your deals — time you open and close them, market conditions, entry points, price movements, the outcome of the deal etc. Most professional traders believe a trading journal is a useful tool that can not only make a trader more disciplined but also acquire important knowledge and test different trading strategies. Revise your trading journal from time to time (weekly, biweekly, monthly), especially when the market is flat. It will help you see your progress and analyze past performance.
2. Risk Management
Abide by risk management rules. Risk management is arguably the most important part of the trading process. As some traders say, you have to learn how to lose before you learn how to win. Risk management is a set of techniques that help traders cope with losses better. For example, most professional traders recommend that you allocate no more than 2% of your entire trading capital to a single deal and use stop-loss and take-profit orders.
3. Technical Analysis
Learn how to set up and apply in practice at least 5 different technical analysis tools. Don’t limit yourself to one type of indicators (e. g. oscillators), as different indicator types are applied differently and provide different signals. You may start with the most popular ones, moving averages, MACD, Alligator and Bollinger Bands. Read the corresponding materials and try trading with these indicators to learn how they behave and what kind of signals they send.
4. Trading Strategy
Develop and use three different trading strategies. Do you already know about scalping, momentum trading and news trading? Well, 2019 could be a good time to test and see if they suit you. But remember that it is important to test trading strategies on a demo account before you put the real money at stake.
5. Emotional Control
Learn to control your emotions. This is probably the hardest of all five. Emotions, no matter if positive or negative, distract you, make your choices less rational and decrease overall performance of your trading activities. Who knows, maybe 2019 is the time when you stop trading according to your feelings and turn into a “cold-blooded trading machine”.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
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