Top Trading Practices for Beginners
If you are just getting into the world of trading, whether it’s cryptocurrencies stocks or the forex market, the simple reality is that you definitely need to know what you are doing in order to make money. If you don’t know what you are doing and you don’t follow the top trading practices out there, the simple reality is that you are probably going to lose all of the money that you invest.
Trading requires a whole lot of skill, knowledge and practice, which means that you have to be aware of the top trading practices for beginners, all too many beginners to start trading without really knowing what they are doing and mostly all of them lose every penny they invest.
If you plan on being a consistently profitable and successful trader, whether it is in the Forex market, the stock market or anything in between, you need to follow the top trading practices. For beginners that we’re about to talk about here.
The Best Trading Practices to Avoid Losses
What we want to do right now is to take a look at the top five best trading practices that you need to follow in order to make profits on a consistent basis, and moreover to avoid losing money.
Engage in Proper Risk Management
One of the absolutely most important trading practices to avoid losses that you need to follow is to engage in proper risk management. Many beginner traders don’t have a clue what real risk management means. First and foremost, a big part of risk management is knowing when to cut your losses. Or in other words, when to cut a trade and close it when it is in a losing position. Most people will hold onto losing trades for way too long in the hopes that they will turn around, but this is nothing more than a huge mistake.
Moreover, risk management also involves knowing where and when to set your stop loss levels in order to prevent huge losses from occurring in the event that trades go South. Furthermore, you also need to realize that risking more than 1% or 2% of your total trading capital on a single trade can indeed be suicide. If you risk any more than that on a single trade, you risk losing way too much money and bottoming out your trading account.
Start Things Small
Yet another mistake that all too many trading newbies make is that they hit the ground running. Now, when it comes to proper trading practices, most people would assume that hitting the ground, running and starting off big is a good thing. But this is really not the case.
When it comes to trading, you definitely need to start out small and here we are mainly talking about trading accounts. Some traders just because they have a lot of money to begin with, I think that they should be opening up $100,000 trading account while brokers and trading platforms are going to charge you a lot of fees and commissions for large trading accounts like that.
So there is really no point in wasting your money because most of it is going to be used to pay fees. If you are not yet overly confident in your trading skills and then there is no point in risking huge sums of money. And this therefore means that there is no point in opening up huge trading accounts.
Get Yourself Educated
The absolute most important trading practices that you need to follow in order to be a successful trader is to get yourself educated. The simple reality of trading is that without a good education and a good foundation of knowledge, you just aren’t going to be successful. Trading is extremely difficult, and if you don’t know all about indicators, oscillators, charting solutions, trading platforms, brokers, technical analysis, fundamental analysis, and more, than you just aren’t going to be successful.
There are so many factors that are involved in trading and you need to know all of them. Therefore, we definitely recommend that you go find yourself a good trading school or Academy that can provide you with all of the information that you need in order to be a profitable and successful trader. Remember, knowledge is power and when it comes to trading, knowledge is money. Best of the trading practices out there are those that provide you with the knowledge that you need in order to be independent and successful.
Don’t Go Blabbing to Family
Now, this might indeed sound like a very odd trading practice to follow. But the simple reality here is that when you are just starting out as a trader, you really shouldn’t be blabbing to your friends and family.
Or in other words, what we mean to say is that you just shouldn’t be telling people that you started trading. The fact of the matter is that people who don’t trade are extremely cynical and skeptical of traders. One question that you will always be asked is if you have already made money. And to be honest, if you just started out trading a week or two ago, the answer that you were going to give is usually always no.
You haven’t made money, and in fact you’ve probably lost some. The problem here is of course that if you tell your family that you’re losing money, they’re going to try to do everything in their power to stop you in your tracks. People who are cynical and skeptical like that will only serve to demolish your motivation and you might just quit trading. Therefore, unless you are an extremely profitable trader, there is really no point in telling people.
Don’t Take Things So Personally
Another one of the best trading practices that you, as a newbie, absolutely need to follow is that you need to stop taking things personally. Whether we’re talking about the market itself, brokers or trading platforms, none of them are out to get you. They are already more than profitable enough without you.
The simple reality here is that if you take things personally, you are going to make emotional and irrational decisions that will just lead to further losses. Everything about trading has to do with logical thought and rational decisions, so don’t take things personally and don’t get emotional. If you suffer a loss instead of taking things personally, you just need to suck it up, analyze why the loss occurred, and then take the appropriate steps to correct your errors.
Important Trading Practices for Beginners – The Bottom Line
At the end of the day, if you manage to adhere to the five best trading practices that we just talked about today, then your chances of becoming a consistently profitable trader increased drastically. Remember, it all starts with a good education, so we definitely recommend taking a few weeks to study trading before you start risking real money.
If you need help day trading, and what you need is a comprehensive education, particularly on Forex trading, then the best place to be is the Income Mentor Box Day Trading Academy. At this time, the IMB Academy is the most comprehensive, user friendly, effective, and affordable Forex trading school out there.