Trading attracts millions of newbies every year. Many people believe that financial markets are the Holy Grail that can be obtained in the first month after starting a professional career. But the problem is that beginners don't know all the pitfalls.
Stocks, Forex platforms, binary options, and other market elements require preliminary study. So here are some basic beginner tips to help you avoid losing your money in the first week.
Know the Markets
Are you trading on Forex, or do you want to conclude a contract with a broker? How about binary options? Regardless of your target, you should know everything about the market you are going to enter. So, first, analyze the movements of currency pairs, indices, and stock prices over the past few years. Then, explore current trends and features. As a rule, all markets are subject to seasonal fluctuations and can react to economic news.
The main problem is that beginners should spend at least a month just analyzing currency pairs. If you are a student, you may need academic assistance. But don't forget to choose a reliable company. According to My Assignment Help reviews on scamfighter.net, not all companies are reliable and fulfill their obligations to customers. It would help if you didn't forget this.
Create a Trading Strategy and Stick To It
If you don't have a plan, then your career as a trader is doomed to failure. Of course, the financial market is a self-regulating mechanism, and you hardly have the skills to predict crowd behavior. However, any strategy is a set of actions aimed at minimizing losses. In addition, you should choose the patterns to which you will react when entering the market.
Take a look at which strategies are the most popular at the moment. Then, see how experienced traders use indicators, oscillators and find moments to buy or sell. You can start trading after you understand the basic principles of using strategies.
Even professionals had to start from scratch. Most likely, beginners will not even be able to understand the difference between indicators and oscillators. However, a demo account is the best option to test all the instruments and the trading terminal. Your main task as a beginner is daily practice. First, analyze economic and political news. Typically, monthly financial statements, politicians' speeches, and global force majeure cause market fluctuations.
As a result, you can make money. Sometimes mirror trading can be the best way to learn. Take a look at how the professionals work and repeat each step they make. If you are a student, you will have to spend at least a few hours a day mastering all the basics. Take a look at the https://www.writingpapersucks.com/paperhelp-org-review/ link to see which writing service you can trust. Delegate some papers to writers and practice trading on a demo account.
Predict the Market
Nobody can predict the market all the time. This is not possible as there are thousands of factors affecting stocks, options, and indices. However, there are general patterns that can be predicted. The market always strives for balance. If the index rises for a long time, you should wait for a correction. To understand the principle of trading, you can take a look at the price levels. They are similar to an electrocardiogram. The minimum and maximum peaks show the deviation from the centerline. The price always strives to be in a channel. If you see dramatic changes, then you can follow the trend.
Know Your Limits
You should understand the difference between trading and gambling. It’s very important. Say no to gambling. Don't forget to set a financial limit you are willing to lose if your strategy does not work. The fact is that even experienced traders lose thousands of dollars in just a couple of hours due to false signals or so-called insider information. Each of your actions should not reduce your deposit by more than 5-10%.
Learn to analyze price movements and stop trading as soon as the market becomes out of control. Many beginners use the Martingale method, turning trading into gambling. But the problem is that increasing each subsequent action by 2.5 times will require a huge deposit from you. Are you ready to risk thousands of dollars to earn $100?
Know When to Stop Trading
Many strategies are effective at specific times of the day or night. The market is volatile in the morning and afternoon, and you can use scalping as your main strategy. At the same time, night trading is based on anticipating sharp price fluctuations. Another tip is related to the desire of beginners to trade longer to earn more. Long sessions and chart analysis are too tedious. Even if you have a natural talent, you shouldn't trade for more than 3-5 hours a day. Don't forget to rest.
Don't Trade With Your Emotions
Emotions are the enemy of any trader. Newbies think that the market works like a casino and try to win even if their deposit is reduced three times. Try to control your emotions. Even if you are very upset, this is not a reason to spend half of your money trying to increase your deposit quickly. Sometimes it is better to stop trading and accept all the losses than to continue digging the financial hole.
By Eva Thaler