What Makes a Good Online Trader? Find Out What It Takes
With the advent of the internet, trading in stocks has never been easier. One can practically buy or sell from their laptop or phone anywhere anytime. So then how come not everyone is into binaries or CFC trading?
Despite how easy things have been made by existing online trading platforms, there is still work to be done. So many online traders burn their trading accounts because they want to get rich quickly without the patient effort needed. Nevertheless, this doesn't have to be you; below is the character that makes for a successful online trader.
Do you take the time to learn the trade and all its fine details? A lot of newbies don't, then they wonder why they are losing money when it’s as simple as clicking the 'Call' or 'Put' buttons.
Luckily, there are plenty of online trading classes to sign up with nowadays. You can also get all the insights you need from online trade platforms like CMC markets. Such websites provide what is called a fictional trading account for practice. This lets you trade with demo currencies to give a practical glimpse into the vast stock trading landscape. It also helps develop the next skill we are going to discuss.
Every success story starts with a plan and it is no different with online trading. You need a strategy that clearly defines your entry and exit points in your every day trading. This will be the blueprint which you will always abide by, and you can never deviate from it.
Determine how many assets you are going to trade in. Preferably, go for those assets whose price movements you can easily predict by learning how they behave under different market conditions and forces. It could be two currency pairs or three indices you are comfortable to trade in. If the first strategy doesn't seem to work, don't be afraid to switch things up until you find what works for you.
Whichever strategy you come up with, stick by it and don't be tempted to switch just because things look 'greener' on the other side. Let every decision count.
Learning the basics is a good point to start, but it doesn't make the cut to becoming a professional online trader. You need to move from the shallow to the deeper end of things, which is the technical aspect of the stock markets. There are various tools of trade for reading price movements like Bollinger Bands, moving averages (MACD), price oscillators, stock market charts to name a few.
These technical analysis tools will help refine the strategies you employ in your daily trading. Since there is so much analysis to be done, in all kinds of assets, expert traders will advise to start small with one or three assets and train yourself on how to use the technical tools to predict their price movements.
Statistics show that about 10% of online traders ever become successful while an entire 90% lose money and opt out. Of the traders who lose money, quite a number will confess to letting emotions cloud their judgement.
Discipline means you don't continue injecting money on a losing assets in the hopes it will show an upward movement and you will gain what you lost. It means putting stops on all your investments to opt out when losses are being incurred. It means not getting too excited on your first win and starting making high risks investments so you can get rich quicker.
A disciplined online trader understands the value of starting small and gradually growing your investments. Additionally, discipline also dictates that you do not give up when you blow your first three attempts of trading real money.
The character of a successful online trader is built on so many attributes. Among them includes formulating a strategy for success, the resilience to learn the trade and the technicalities defining it, and having the discipline to stick to strategies, accept wins and losses and never letting emotions overtake sound judgement. The good thing about trading online today is that there are so many platforms that does half the work for you so you don’t need to make the same mistakes earlier conventional traders made.
*This is a partner post.