In order to beat the market, you need to increase your edge over the market. You need to make sure to improve your trading strategy and learn some of the ‘secrets’ of the trade, in order to improve your chances of success. Here we will look at five tips that will help to give you an advantage while trading.
- Focus on Quality Trades – In other words, reduce your trading frequency and focus on quality, not quantity. The more often you trade, the more you will end up giving back in costs and losses.
- Have Patience – It is important to let trades run their course. You need to enter trades you are confident about and understand that they take time to play out in the market. Trades often take longer to play out than we expect and it is incorrect to think that trading allows you to make money fast. If you get nervous and close trades out before they have run their course, you are unlikely to trade successfully.
- Manage Your Money and Hold Out for the Right Trends – You will be more successful as a trader if you trade twice a year on a quality trade than if you trade 200 times a year and make small amounts (or more likely, lose often). It is important to manage your money well so that when a trend comes around, you have the capital to benefit from it. This requires patience as well because if you have used up your capital early on, you will not be able to take advantage when the right trend comes.
- Keep Learning – Too many people feel that trading is something they can just dabble in and make money from. But, like most other things, if you want to be successful at trading, you need to educate yourself and keep learning. Read books, read articles, develop a strategy and work to master it.
- Stay in Control – You cannot control the market, but you can control yourself. This encompasses what we spoke about before about being patient and allowing the trade to run its course, as well as the patience required to keep your capital for the right trade. But, it also focuses on how you follow your strategy, remain calm and make sure not to let your emotions get in the way while you’re trading. Also, avoid being affected by previous trades and view each trade individually.