Many traders tend to only chase profits when they have a position. However, there are many traders who are chasing profits but without any results. So, what should you pay attention to while trading to become a profitable trader?
Professional traders always keep a cool eye on the market, including preparation. However, amateur traders, on the contrary, panic while trying to build a strategy while holding a position.
Just as professional athletes and Olympic athletes perform well in competition, traders need to prepare in advance so that they can confidently execute their trading strategies. This is especially true in the trading world, where professionals and amateurs alike stand on the same playing field and aim for profits. The market is not so kind to traders that they can make money on the spur of the moment without preparation against professionals from around the world.
Six points to keep in mind while trading:
1. Look at the market calmly
Professional traders always look at the market calmly, whether the trade results in a profit or a loss. This is because they accept the fact that it is impossible to profit from the market all the time. Losses are unpleasant and something we all want to avoid, but it is the trader's job to be able to accept the losses as long as they are unavoidable.
Whenever you open a position, you should set a stop loss and adjust it so that even if that stop loss is executed, it will not be painful. It is also important to set a maximum daily loss. Many amateur traders tend to repeat trades over and over again in an attempt to recover their losses, but this almost always ends up in making their losses larger than they can recover.
Professional traders always set a stop-loss limit, a daily maximum loss amount, and try not to lose more than that amount. Once you are able to control your losses, you will turn into a trader who can accumulate profits.
2. Follow a Trade Plan
Many traders make a trade plan before they trade, but when they actually look at the charts, they often make trades that differ from the plan they made and incur losses. I think it is a good idea to start by disciplining yourself so that you can follow the plan you have made.
When you open a position, hold a position, or close a position, always make sure that you are following your trading plan. At first, you may forget your plan because you are not used to it. It is a good idea to keep a written plan with you so that you can check it immediately. Then, after closing a position, always check to see if the trade went as planned. Looking back allows you to be objective about your trades and learn things that you may not have noticed during the trade.
3. Be patient
When you open a chart and it keeps moving, it is very understandable to want to open a position right away. While it is good to seek profits, remember to keep your cool and avoid losses.
Unless you follow a trading strategy, it is difficult to earn consistent profits. There is no continuity in the profits you happen to make, and you never know when you will suffer another loss. However, if you trade according to a plan, you will be able to know the winning rate of the strategy and how likely it is to result in a loss, and you will always be able to face the market calmly.
Waiting until the entry point in your trade plan arrives is also an important skill. Once you have a position, you need to be patient and follow your plan to increase your profits; it is difficult to increase your profits if you cannot tolerate closing a position in less than a minute. Even when scalping, you want to have a few minutes to increase your profits. However, if the target is not reached after 15 minutes, you may decide that you cannot hope to make any more profit from the position and close it.
4. Take regular breaks
Trading is a concentrated business. If you lose your concentration, you will not be able to make calm decisions, so be sure to take regular breaks while trading. We recommend that you stay away from the charts because a mental state that makes it impossible to make calm decisions increases the risk of incurring losses.
It is understandable to want to open a position as soon as you open a chart, but this is impatience. Trading opportunities will come and go, so avoid rushing to enter a trade in order to take advantage of the opportunity in front of you.
Avoid taking a position when you are feeling tired, impatient, frustrated, or any other negative emotion, and try to give yourself time to relax with a cup of tea or coffee, even if it is only for 5 or 10 minutes, and come back to create an environment in which you can focus again.
5. Pay attention to news
Markets move and change with the release of economic indicators and news. No matter what strategy you use, it is difficult to ignore the news and continue to profit from your trades.
Sometimes the news causes a temporary increase in volatility, and other times the news establishes a new trend. Make it a habit to check news and economic indicator releases that affect the market you are trading so that you don't miss them. It is a good idea to keep a list of favorite news sites that you are familiar with so that you can check them immediately.
6. Do not change your trading strategy
We sometimes see traders who frequently change their trading strategies because they are not winning. In fact, there is almost always nothing wrong with the trading plan itself. However, when they open the chart, they are at the mercy of the ups and downs of the price and do not realize that they are not executing the trade they originally intended. They keep changing their trading strategies, and they find it difficult to set a direction, and they are at a loss.
With so many different strategies being introduced in various media, it is easy to get confused about which one to use, but the most important thing is to use a simple strategy that allows you to make decisions instantly. When many indicators are displayed on a chart, the signs for each indicator are often different. This makes it difficult to find the right time to enter the market, and you may end up making a trade that was not part of your original strategy.
First of all, you should try to use one or two indicators and continue to use the strategy you have decided on for a certain period of time.