Here are my 7 most Highly Effective Trading Habits You Should Learn First. These simple habits can make all the difference to your trading results long and short term. There is also an InfoGraphic to keep and share at the bottom of the post.
Have a Plan
However or whatever you are planning to trade the markets, make a plan and stick to it.
If you are day trading or trading longer term, learn everything you can about how to do it from someone that is doing it.
Decide on your strategy and become a master at that one thing. No chopping and changing, no moving the goal posts. Find a winning strategy that suits you and make it work.
Trading is simple enough, don’t over complicate things. Make a plan and abide by it. You get rich over time not over a day. Plan to be successful over time.
Limit Your Trades.
Like a bull in a china shop, the new trader enters the market crashing around. New traders want to trade anything and everything. But… STOP. Don’t act like a fool. Set a limit to how many times a day you will trade. I trade once a day… very occasionally I’ll make a couple of trades a day.
Having that kind of discipline will pay huge dividends along with your friend… time.
Only Trade During Set Hours
Set the times of day that you will be actively looking for an opportunity to trade the markets. I prefer 8 am -12 noon. If nothing really happens in that time, and I’m not 100% certain in my decision to enter a trade I normally accept that nothing may happen that day.
I have my alerts set up in case something does materialise and then I can just trade on my IPhone.
Learn to do Nothing.
If in doubt wait it out. Trading is not a nonstop game of signal after signal. If the strategy you are using doesn’t seem to be suggesting any trades, that is probably because there aren’t any.
Get use to waiting for the right opportunity to trade. That is were the money is made. In the waiting every time.
Use Binary Trading or Guaranteed Stop Losses.
It is far better for new traders to know their downside prior to entering a trade. The emotion of having to close a losing trade and take a loss can hammer new traders.
Set guaranteed stop losses if spread betting or better still use binary trades if your chosen market is available.
Knowing where you stand when you start out trading the markets is helpful on many levels.
Don’t start trading with money that you can afford to lose. That approach is BS at best. Start trading with the bare minimum sized stakes that will keep you interested in what’s going on.
If a 0.50p trade just doesn’t float your boat consider if £25 is too much? Find the middle ground and learn from there.
Don’t learn the hard way. Learn moving forward not backwards.
Compound your Profits
You won’t get rich from saving your earnings [or it’s unlikely]. But making some of your savings work for you and then compounding those profits is how you can get ahead.
That is how every millionaire I have ever met has done it.
Treat trading like a business and not like a hobby or pastime. Take it seriously and compound your winnings.