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What makes a new trader become a successful forex or stock trader

By Edited Nov 13, 2013 0 1

Learning to trade the stock or forex markets takes patience and learning all you can on how to be a successful trader.

You need to read and study as much as you can before you in invest any money into trading. Many different brokers have a practice account that you can trade fake money. This will help you understand how to read charts and different trading platforms. You need to manage your buy and sell points with no emotions. Keeping your emotions out of forex or stock trading is the first thing you need to accomplish. When you enter a trade you need to know when you want to place your stops and have a idea when you want to take profit.

It is a mistake to just enter a trade out of boredom especially if you are trading live with real money. If you understand the trade before to place it your chances of making a profit are greatly increased. Keeping your emotions out of the trade will help you better understand the trade especially if it is a losing stock or forex trade. That is why it is important to know your exit strategy and when to take profits. Learning to have a basic understanding of the stock or forex charts you are trading will help in determining your take profit and stop losses. New traders often have set their profits to high and only think in dollar amounts. To be a successful investor you need to use percentages not dollar amounts. All the profitable trader have a percentage goal not a dollar goal.

Having a trading plan will help you achieve your investment goals. This is crucial to make any money trading the markets. If you set to high a exit on any trade most new traders see their trade turn into a breakeven or losing one as the trade retraces back to their entry. Remember pigs get slaughtered. Once you have made a percentage on the trade you need to exit and move on to the next trade. Make sure to analyze each trade this will keep your losses to a minimum especially if your serious about investing your money in trading the stock markets. Learn the importance of using stop losses. The stop loss should be set in the area of resistance or support. The same is true for taking profits. New traders need to learn this so it becomes a habit when they place a trade.

Make sure when you start out trading that you use money you can afford to lose. loosing trade are a big part of the learning experience. That is why you need to use stop losses and let your winners run. Once you have a trading plan this will become second nature and your trading profits will grow. A new trader needs to learn support and resistance levels especially if they are learning to trade the forex markets. Most forex brokers will have charts that can be set to show you these levels.


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Comments

Sep 11, 2009 6:55am
sneptech
I learned this the hard way! Great advice and I can now say from experience that there is money to be made in forex. Wish I had read this five years ago.
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