New stock traders are always fascinated by the trading industry. They are trying their best to catch the big market movement. At times, they become lucky but most of the time they lose a big portion of their investment after a few months. You need to be cautious about the stock trading business. Just knowing about the support and resistance level is not enough. Even after having a fair trading method you might not be able to make money at all.
This article is dedicated to the stock traders who are most likely to make some common mistakes and ruin their careers. Go through this article very carefully because it will help you to make the right decision at the right time.
1. Do you have a valid trading strategy?
You have to ask yourself whether you have a valid trading strategy or not. If not, you are not ready to trade in the real market. Those who don’t have any clue whether their system works or not, should use a demo account and test their trading method. If they can make consistent profit for a few months, they can start investing in the real market. During the learning stage, you should take some steps to improve your trading skills. Without knowing the basic factors, it is a very big mistake to jump into the trading business.
So, what about the premium trading strategy available for sale in the online market place? To tell the truth, this method is not going to help. Though you can take some basic ideas about the professional traders’ trading method but due to the psychological difference between you and strategy developer, the system is most likely to fail.
2. Find the best stock broker
Finding the best stock broker is very crucial. If you live in Hong Kong, you can buy stocks with the best broker, Saxo. Choosing such a good broker has many unique advantages. Traders will be able to use the advanced tools to do the proper market analysis. They will slowly learn new things by using free educational resources provided by a top-rated broker. But if you chose to trade with a bad broker, you are not going to get any helpful resources. Even if you manage to earn some money by trading stock you are going to have a tough time to withdraw the money.
To find a good broker, search in the interest in their reputations and regulations. If things seem perfect, you can start with the demo account. The demo account can give you the privilege to test the real trading condition without investing any real money.
3. Trade with the news
Those who are trying to avoid the news in stock trading is going to lose money. You have to trade with the news to take advantage of the market volatility. Though it is a little bit hard for the rookies, you can learn to analyze the key news by using some of the basic rules of the investment business. Once you get used to the fundamental factors of the market, you are not going to say trading is a job for rookies. It requires hard work to become a skilled stock trader.
4. Trade with discipline
As a new trader, you should not break your discipline. Discipline is the key to success in any profession. In the stock market, you will be facing many ups and downs. Unless you have a balanced trading routine, it will be tough to control your greed and emotions. Soon you will be placing random trades with high risk and will blow up the account. Develop self-discipline to become a great trader in the Forex market. Forget about shortcuts or seeking the Holy Grail of trading. Be aware of the risk factors and try to follow rules at any cost.