Surviving in the stock trading business is one of the most difficult tasks for novice traders. If you want to change your life, you must learn to survive in the stock market. Professional traders always think they know everything about this market. But if you ask them about their daily routine, you will be surprised to know that they are still learning new things. Learning has no end in the trading profession. So, to survive in the trading profession, you must keep on learning new things.
In today’s article, we are going to discuss some amazing tips which will help you to take the trades just like a professional trader. By using the four tips, you will also manage to reduce the risk exposure in your trading profession.
The famous 1% rule
You should never take the market with high risk. If you have less than 1 year of trading experience, you should risk only 1% of your account balance. By doing so, you should be able to make a regular profit in this industry. But some novice traders think that by risking one percent of the trading capital, they will never learn to become successful traders in the stock market. But this is not all true. If you see the elite trader, you will notice some of their trade with less than 1% risk. However, if you trade with a small trading account, you may risk 2-3% of your account balance.
Fix your problem
Every trader has some kind of problem with their trading strategy. You might be using a professional trading strategy right now but after few months this same trading strategy might have some problems. The only way by which you can fix the problem is to revise your trading strategy in the demo account. Try it now and you definitely feel the change in your trading performance. Once you master the key way to take the trades by fixing the faults in your trading system, you will become much more confident with your actions. So, focus on the demo account and try to revise your trading strategy in a standard way.
Stick to the core trend
The majority of novice traders are blowing up their trading account since they don’t have the skills to deal with the major trend. If you want to succeed as a retail trader, you must learn the proper way to find the existing trend in the market. It might take a while to get used to the overall process of trend trading strategy but you can shorten the learning process with strong devotion. Once you become confident with the trending technique, you will become much more experienced in dealing with the trend. Moreover, you won’t have to deal with the frequent losing trades.
Some of the novice traders often analyze the trend in the lower time frame. But this is not the proper way to find reliable trade signals in the market. If you truly believe trading is the right profession for your business, you should always take the trades in a higher time frame. By doing so, you will get much more accurate data reading.
Avoid using too many tools
Thousands of retail traders are using the most complex trading system in the world. They think it is the most effective way to make a profit in the trading business. But if you do the proper research and look at the professional trader, you will realize it is the most common mistake in the trading business. A trader should always look for a conservative trading method to protect their trading capital. If they break the basic rules and aim for big profit ignoring the risk to reward ratio factor, they will keep on losing money most of the time. So, be careful while using the tools. Never overload your trading chart with too many indicators.