By now you have already come across the disclaimer that trading on the financial market is very risky, which is very true. However, according to one of the top senior financial advisors at Wilkins Finance, there are people who have ventured into the same thing and have become successful enough to be role models. Even if the field is very risky, with the right advice you can still become successful.
Below is an advice from expert traders on how to become successful in financial markets trading:
You will have to trust your trading strategy
To start with you have to come up with a trading strategy and test it to ensure that the strategy works and that it is profitable. Secondly, you will have to trust that strategy that you have come up with. Remember, you are the one who has chosen or come up with it and it would only be fair if you stayed within the rules that you have stipulated in that strategy.
One of the things that kill financial market trading is greed. This is trading when you should not be trading. Even if you see a good trading opportunity, wait till you receive a signal from your trading strategy. Again, you should never trade to revenge a loss. Trading is just like any business and losses are a common occurrence. The only thing you have to ensure is that the losses do not exceed the profits.
Avoid news releases
You should ensure that news releases, especially major news, should not find you in the market. You should always stay updated on the financial and economic news which is being released so as to keep off the market when they are broadcasted. The markets are usually very volatile during news releases and they also tend to make very large abrupt market swings and if you have orders on the opposite side of the movements, then you will end up making extra huge losses.
During the news releases, you should ensure that you close all the open trades. Some brokers tend to freeze the trading platforms to avoid traders from placing trades. If your broker freezes the platform when you were placing an order, then your order will be slipped (commonly known as slippage) to another level where you did not anticipate it to enter and it may result to losses. You should only trade news releases if your trading strategy allows you to do so. You can use strategies like hedging to trade news releases.
Learn to use stop levels
Stop levels are the take profits and stop loss levels. The take profit level is the level at which you want your order to automatically get closed once the profits hit that level. On the other hand, the stop loss level is the level at which you want your order to automatically get closed once the loss hit that level.
You should use top levels for all your trades. They help with risk management. With the stop levels, your trades will always not exceed your expectations especially if the trades make a loss. Also, at times the markets may misbehave and it will only take a stop loss from preventing your account from receiving a margin call.
Avoid opening too many trades at the same time
You should always keep an eye on your margin levels to avoid getting a margin call. Your free margin should never go below half your total account balance. In case it does, you should also be aware of how to handle a margin call. Apart from opening too many trades, you should also ensure that the lot size of the trade that you open is reasonable considering your account balance. The larger the lot size, the more risk since in case the markets go against you, the more the losses that you would make.
Always make use of your demo account
You should never lack a demo trading account. Actually, you should avoid brokers with no demo accounts. In contrast to the thoughts of many, the demo account is not only for the beginner. Despite the fact that the beginners have to first practice on a demo account before trading their real hard-earned money on a real trading account, the experienced traders also use demo accounts.
Any trading strategy, technical indicators, trading signals provided by a signal provider or expert advisers must first be tested in a demo account. This way you will be able to screen those things that are profitable so that you can use them for real trading accounts.