ADVICES FOR BEGINNERS



1. Venture capital. To start successful trading you must have sufficient venture capital. Venture capital is the capital, which you can lose without the change of your life style. It is necessary to trade with countenance and to be focused on the market not on your finance. You should never use your last money for trading, because the pressure and the responsibility would be too big and could take your attention from the situation at the market, which could increase the possibility of making mistakes. Essential venture capital is 10.000, - USD. Minimums for opening of Mini accounts is 500, - USD and for Standard accounts 2.000, - USD. It is needed to keep in mind, the less money you have on your account, the less money you can afford to lose in one trade.
 
2. Stop your losses and let your profits to increase. This is a very universal rule of the market. You should try to close your losing trades as soon as possible and your winning profitable positions hold open as long as possible. Do not let the position to change from profitable to the losing one. If your position is profitable it is good to use Trailing Stop, which is moving together with your profits and do not let your winning position to change to losing one, in case  the market will suddenly move in the opposite direction. Keep in mind, that there isn’t single trader at the market, even the most experienced, who wouldn’t have the losing trades. The key for success is to cut your losses and let your profits increasing.

3. Limiting of losses. Set strict limits for your losing trades, so that you wouldn’t lose more that is necessary.  These limits should depend on the size of your account between 3-10% of the total amount on this account during trading, respectively 1-2% on one trade. Never violate the rules you set yourself, you would only harm yourself. The non-discipline is not paying off. If the market starts to go in the wrong direction, do not look for some excuses, why not to close your position in the moment, when the losses reach your set limits, immediately close the position.

4. The exuberance is not paying off. One of the most serious mistakes, which the trader can make, is that although he or she sees that, the market turned against him or her and get over the set limits of losses, do not close the position and looks for excuses, why to leave it open. The price can for example move in the required direction...But what if not? The market hasn’t got the pity with anybody. The opposite price can move against you much more, which can lead into total lose of your money, and thus loss of possibility to make some money! That’s why you should never violate your rules and limits, which you set yourself! Stop your losses!     

5. Profitable & losing trades. If the amount from successful trades gets over the amount lost in losing trades and your account balance will be increasing, you achieved the positive result. But if you have got five losing trades for 1.000, - USD and only one profitable for 2.000, - USD, it probably was just luck and it doesn’t mean anything. You should never rely on the luck, it doesn’t have to come. It is important for you to understand, how you made the profits or losses. It is not possible to rely on your intuition, although it is also very important in the trading business.

6. Revenge and rehearsal. There are two situations, in which are traders partially unprotected – immediately after the big profit or loss. If they just made a huge profit, they feel omnipotent. They think they are not vulnerable. They believe that they can make whatever trade, because each must be winning. On the other hand there is following of substantial loss. Some traders are agonizing to get the losses back, reach the “revenge”. Their business became wild and non-managed. In every case the trader lost the discipline, which is necessary for reasonable trading. The best thing you can do in this situation is to make the “trading holiday”. In other words, simply stop trading for a day or two (or longer time if necessary), till the flush of success or the agony from loss will lose. Than you can get back to the market and behave like these things never happened.

7. Buy low, sell high. The basic concept of honest money making is in the buying low and selling high, which is in everyday life easily understandable add we are used to it. It is simply normal aim of trading. When trading futures you can profit on the price movements in both directions. With long positions is needed to buy low and sell high. We want prices to increase. With short positions is needed to sell high and buy low. We want prices to decline.

8. Analysis of mistakes. Mistakes and losses are the part of trading at whatever market and they are unpredictable. The sooner you start to take losses as the natural part of business, the sooner you start to make money. Your losses are not related to your intellectual abilities, that’s why you shouldn’t blame yourself, others or market. You should analyze your mistakes and shouldn’t make the same mistakes in next trading. It is useless to go against the wall, if you lose 200, - USD as well as it is not adequate to celebrate the profit of 500, - USD. You should be diligent in your trading. The better you are able to hold your emotions in check, the sooner you will be able to see the real situation at the market and decide correctly. Learn to look at your losses and profits only as on numbers, not money and understand that traders are not learning from their wins but from losses. You should take each loss as the step forward in next winning trade. 

9. Emotions. Because trading at the financial and commodity markets is from 90% psychical process and the rest are knowledge and experience, the biggest fiend of the trader is himself or herself, his/her avidity, costliness, uncertainty or very high certainty, hastiness, disability to control his/her emotions. If your finance will get over your mind, you wouldn’t be able to make reasonable decisions, as well as you are tired or unprepared for trading. Learn to believe yourself, and if you decide for trade, then do it. If you are not able to decide, you shouldn’t do the trade. You should accompany your character and temperament with the trading system. If you are not the detailman, you should use the system that is not requiring details. If you are short-tempered, you should avoid the intra day trading. Learn to control your emotions and use them maximally for your benefit.   

10. Patience. You should never open the position because of you are bored and want to do something. There is not any regulation saying how many positions you should open in given time period. Choose your trades carefully and learn to be patient. If you feel tired, or in bad psychic or physic condition, you should take a day or week of holiday. Believe or not, nothing will escape to you, because there always appear new excellent trading opportunities.     

11. Diary. Write you diary, where you are explaining why you entered particular trades and why you got off. Note the market events that influenced your decision to open or close the position. Analyze, and make conclusions from what you have created and write the result down into your diary. Compare what you made with your initial money management and trading strategy. If your trade was profitable it is important to understand and keep in mind the flow of your inventions, which support you in the right decision. Very important is to understand why your trade way losing. There are not in fact so many mistakes that are done by beginning traders, and if you are able to understand them, you can next time avoid them.

12. It is your business. Read the opinions of others, educate yourself, but make your trading decisions on the basis of your own market analysis. Use everything, what you learnt, as the guide and find out yourself, what is better for you. The basic rules together with your education, knowledge and understanding of markets create a unique approach. This should be your trading system, including money management and psychological restraint as well as decisions about the entries or exits from trades. You should all tips and advices consult in the frame of your own experience and never allow somebody to trade instead of you.

13. Trading instruments. If you are not willing to put in all your time, you should try to focus on watching three to five markets and trade at two or three of them. It should be markets, where you already have some experience; you have some specific interest in them or knowledge thanks to your occupation or experience. Trading at the markets you have some relation with and their research can be easier. If you are trading with currencies, focus on 1-2 cross-rates, but watch on and analyze behavior of all currencies, because they are reciprocally dependent. 

14. Trading time. Consider carefully, how many obligations, money and psychical resources are you able to make in given time period. Most of the part-time traders should avoid the intra day trading, because they can not sit in front of the screen during trading hours. Intra day trading also can oftentimes emotionally exhaust you so that you would have less for your real job. Try to trade in the same hours, because for example the behavior of currencies and commodities is different in various times of the day. Before you start trading, look at, what happened at the market, during the time you didn’t follow the market events. Most of beginning traders are also not recommended to trade on Sunday new York time, because it is in fact Monday morning at the Asian markets and thus the behavior of currencies for example is in this time very hardly predictable. The same situation is on Fridays, because the market oftentimes turns from the direction, which has been following during the week, what can be a very unpleasant surprise for you. 

15. Demo Trading. Before you decide to open the Live account, trade some time on the demo account. Train on the demo version so long time, till you gain the self-confidence. Your main aim in Demo trading should be to create your own trading style and method so that your profits would significantly get over the losses. Try to think that you are trading on the Live account. When trading on the demo version, you should behave in the same manner, as you are trading Live, because the technique you choose is determining your trading success.

16. Flexibility. Be open to new ideas, new strategies, new markets, new information, new manners of trading and communication. Your approach to markets should contain the flexibility to change the opinions. Trade in short positions as well as in the long positions. Make the adjustment in your money management or trading system. Think about markets you have never trade on. The successful trader is oftentimes who is able to think out a lot of alternatives or possibilities. Successful traders have got the flexibility of the chess player, to acclimatize in the unknown.

17. Studying. For successful trading at the stock, commodity and currency markets, it is necessary to fully understand these markets. Read the basic information on this portal and learn the basics of the trading. Read detailed information about everything regarding trading. Look for other information sources on the internet, read books of other authors and make your own opinion your own trading system. Study charts, market news, fundamental data. Nobody said that trading at the financial markets is easy. It requires the patience and systematic approach. It can significantly change your life in the financial sense!                                 


   

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