Having a System is Critical

If you want to be a successful trader, you need to have a system.

This is important. It doesn’t need to be super fancy, but it does need to be something that you will stick with. When you define rules for your trading, you begin to eliminate human error, which is where so many people lose money trading. It is a seemingly small step, but when you do it right, it is one of the most important steps you will take toward becoming a profitable trader.

Automation is Your Friend

The less direct work you have to do, the better. Not only does this save you time later on, it also helps remove you from the heat of the moment, which allows you to think more logically and less emotionally. Depending upon the type of trading that you will be doing, this may be easier than you might think. For example, if you are trading Forex and your broker can connect with MetaTrader 4, you can automate every single trade if you desire to. MT4 allows you set up trading conditions so that buying and selling happens even if you are not at your computer. Furthermore, there are many expert advisors out there that will allow you to use them as a trading robot. Basically, you put your stipulations into a software program, and then all of your trades are made for you as long as your trading program is open. You should check on things once or twice a week to monitor progress and ensure that everything is doing what it should, but the bulk of the work will now be off your plate. This is easy to do within the Forex market, and it seems like things are moving in this direction within the binary options market, too.
Good Trading

Trading Stocks

Things will be different in the stock market. Automatic trading is possible, but the vast majority of people should not even think about trying it. Things move too quickly here and the results can be catastrophic because you will be trading much larger amounts of cash. High frequency traders can get away with it, but these are huge financial institutions with millions of dollars to spare. You don’t have this luxury, so it’s not with the risk, even with solid stop-loss points in place.

Day traders need a different approach, but their best course of action is to do it manually. A combination of real time monitoring and a high speed internet connection will make sure that you’re not taken off guard. Always use stops, if course, even on the upside of things just to prepare for the possibility of a fast reversal against you.

Know Yourself

Shakespeare once wrote, “to thine own self be true,” and it is pretty good advice for trading. If you know your strengths and weaknesses in the marketplace, you can fix the areas where you need help, and magnify the places where you thrive. It will get rid of holes in your profits and help you make more money. This will be an ongoing task, but over the first few months of trading you will find a lot of things to observe. Keep a trade journal where you record as much as possible before executing each trade. Include your emotions, too. You will learn a lot about yourself and your thought process, and it will be information that you can use to improve yourself over time. You will find that your style will change over the course of time, too, and you want to make sure that you are making forward progress, not backward. It’s important for two reasons: it gives you confidence, and it ensures that you actually are making progress, rather than just thinking you are. A lot of people think they are getting better, but are really just spinning their tires. You don’t need to be in this boat.

Knowing yourself and how you trade will help you to find what the best trades and assets are for you, too. You will also find the best markets to trade in, and the best times of day. All of this information goes toward one end goal: boosting profits.