Here are 15 tips for traders that operate in all kinds of trading whether daytrading, swing trading or algo trading. They are also universal and works whether you shop with Forex, shares. Futures, Options or CFD’s. Here are my 15 trading tips to you traders who want to learn to trade.
- The first point is perhaps the most important tip of them all. It is the tip to choose the right broker. For traders who often perform several trades a day, low brokerage fees are of utmost importance! If every trade costs you even a small amount, it could quickly begin to consume your trading profits if the trading strategy you work with is making many but small trades. This should be considered as general guidelines, not only pertinent to certain types of strategies that rely on small but many profits. All types of fees and commission should be minimized. With many transactions, you could end up paying a lot of money in vain, for no added benefit at all. Spend some time researching brokers to find the cheapest one. Don’t go with the most popular alternative just because you have heard most of them! Would you pay higher interest on your mortgage than you have to? Probably not! Bring this attitude into trading, and you will save some money!
- Another very important tip is that you need an edge! The edge is what makes you a profitable trader and the robust foundation of your whole trading business! In short, it means that you know that the strategies and methods you employ in the markets have worked in the past, and are likely to continue to produce profits going forward! A commonly made reference is the one to the concept of the casino. The reason why casinos always make money is that the odds are always on their side. They know that if a dice has six sides, and one side gives a profit of 1000$ to the player, while the five other give a loss of 250$, they will make money in the long run. Unfortunately, most beginning traders are unaware of what edges are. This is the main reason why it’s said that more than 90% of traders lose money trading. If you have an edge, you have come further than most aspiring traders ever will.
- The third trading tip is to never let losses grow big! As a rule of thumb, you should never risk more than 1-2% of your account on each trade . Always calculate your position size in relation to your stop loss. For example, if you only can risk 2000$, and your stop loss is placed so that it getting hit results in a loss of 1000$ dollars, then you can buy 2 contracts. In my algo trading, I risk around 0,75-1% on each trade. However, there are strategies, namely mean reversion strategies, where the odds of the trade turning around increases the more the security goes down. In such cases, it might not be appropriate to use stop losses. In my trading, I skip the stop loss for around 5-10% of my strategies. To manage risk there are some other alternatives that I will not go into deeper in this article. As to the mean reversion strategies, they are great to include for diversification. In trading, you want to spread your risks as much as you can between different styles of strategies and markets. That is the closest we can come to any form of “holy grail”.
- Take every opportunity to learn from traders who have already succeeded. However, how do you know that what they claim about their trading is true? Well, you can ask for proof in the form of live track records. However, whatever the vendor claims, start papertrading what he or she offers for sale. Many providers of trading signals may amaze you with beautiful equity curves. Unfortunately, very few of them hold what they promise!
- Find information online! On the Internet, you can find answers to most of your questions. However, it may be difficult to know what sources are credible and which are not. Unfortunately, most advice you will find will not help at all. Conversely, it will be completely wrong which could be very dangerous. THere are many people who want to believe that they know how to trade well, who occupy themselves with “teaching” their “methods”. The best thing you can do is to ask somebody you trust what is worth reading and what is not. Many traders just want to confirm their own erroneous views on different matters, instead of realizing that everything cannot be like they want it to. Trading is a very difficult occupation and it will take a long time to gain proficiency. This is a fact that most people do not want to take in. They rather want to believe that there is a quick and painless way to get rich. Not that they have undertaken a hobby that will require immense amounts of work before they can earn their very first dollar!
- Another great trading tip is to read as much you can. There are many great books on trading that can provide you with valuable lessons and know-how. Often, one single trading tip can lead you to insights or knowledge that transforms your trading for the better. For example, one chapter about some special price action might spark ideas that will generate several strategies for you. Trading books and trading investments easily generate more money than you bought them for. And since trading knowledge and its ramifications is of the incremental sort, there is nearly no limit to how much money one single great advice can generate. However, as with trading information online, there are many books that could be to the detriment of you trading career. Be careful with what you read! Here at the robust trader, we have gathered some of the books we consider worth reading!
- As a trader, you must make sure that your decisions have solid factual grounds to support them. You must have a trading plan that covers all possible scenarios you can think of, so that you’re prepared regardless what happens! This applies to all types of traders, not only Swing or daytraders. As an algo trader you are faced with difficult decisions as well. For example, do you know when to turn off a strategy, or when to add a new one to a growing portfolio? Swing and daytraders, somewhat more than algo traders, will find that their biggest enemy isn’t the market, but themselves. For somebody who has never traded before, the psychological challenges that come with manual trading are unimaginable, albeit not insuperable. The urge to act on what you “know” instead of what your trading plan tells you, at times can be overwhelming. Many traders find it hard not to act on emotions and for them automated trading may be the solution. If all rules are written down and executed by a computer, there is no room for any subjective interpretation. Many traders have benefited greatly from automation. If you struggle with discipline and think that your strategy could be converted into quantifiable rules, this is the way to go!
- We all make mistakes, but some learn from them and others don’t. Make sure that you write down every mistake you make and try to understand why it was made, so that you don’t need to repeat it!
- Writing a trading journal is a very helpful habit that you should acquire as soon as you start trading. Every day, write down what went well and what went less well. Also note why things went wrong, or why they went right as well what things felt hard and what felt easy. After a while, patterns will reveal themselves and you will understand better what you need to work on. In the long term, the habit of writing your trading journal will develop into a very powerful tool that you don’t want to be without!
- Be careful with what you buy on the Internet! There are many vendors of trading signals, trading advice and other types of products. Most of these are fake, and are most likely not trading successfully themselves. If you are looking to buy the services or products of a vendor, always ask for real time results. Everyone can create a very nice looking backtest, but very few are capable of creating models that work into the future. To be frank, most trading vendors only make money from people they manage to fool. Be careful with what services you buy and always make solid research! If a vendor claims to have systems with equity curves going in one straight line from the bottom to the top, and claims that you will get that type of results, don’t bother anymore! Live trading will never become as good as backtested results, and anyone claiming that either doesn’t trade himself, or is trying to scam people for money!
- Rise up if you fall. GIVE NEVER UP! This is perhaps the most important property of the traders. You will fail and doing wrong over and over again. Don’t let this stop you. Just try to minimize it as much as possible in the beginning and learn from it as much as you can. A tradingjournal that I write about above is a very good tool for this. Take the height for your mistakes. Welcome them and take it for granted that they show up. They will show up the most in the beginning so trejda therefore not with such large positions so that it will be expensive. After your introductory period is over, and you along with your tradingjournal begins to gain control on the worst of your mistakes and Miss so you can start to increase the size of your trades.
- ALWAYS decide where or how you will sell before you take a trade. This means that you have already decided a stoploss, profittarget, trailingstopp el, etc. before you take the trade. Of course, these must be based on your trading system. It is a common mistake among newbies not having decided where to have their exits before taking his trade. Trading is all about making more of what is good for you and less of it that goes bad … This is a great post that explains it a little closer. To succeed you with trading. The post might be viewed a bit like a joke but it’s really true what it says. To determine where to sell before you buy does not mean that one must determine the exact purchase levels before buying, but more that you should determine what type of indicator, stop or exit you should use. Determine, with the help of your approach that you have and that you know works, what stopploss thou shalt sell at and what profit target or trailingstopp you should use. It is a very important step to eliminate your emotions and the tricks they can ask you when it starts to heat to your location. You may begin to lose money and get stressed or maybe you tjäner you money and start to get nevös and afraid of losing them, you may have lost money 4-5 times in a row and are afraid to take a new position that you do not want to lose a sixth time. Yes there are hundreds of scenarios I can paint up there even feelings give themselves. Don’t think that you are immune to this. All in trading may face his own demons. Believe me, I’ve trained hundreds of tradingelever in the United States and Sweden and the demons come in all different shapes and varieties. The only thing you can be sure of is that they show up sometime. What you do with them can be that topples, or help you to the success you seek. My demons I managed to master by starting with automated trading instead. In this way is now my strategies as they are designed to do.
- Patience is an important characteristic for traders. A major advantage of trading on the stock market is that you do not need to shop at all. You can skip a trade and wait until you have a better edge. This requires a lot of patience. Perhaps the biggest edgen you have is not trejda at all. It will give you a great advantage to not engage in any trading when there simply is no edge or trade to make money. This happens quite often, and it comes not to chase something that does not exist.
- To get to the source, you have to go against the tide. Do not do as everyone else but go your own way. They say that only 1% or less successful trading. What does it mean? Well, do not like all the others if you do not want to fall into the same trap, but find your own path.
- Have a tradingjournal where you write down your trades and follow up everything you do. Not just when you bought and sold, but also things that you learned. The applies both blunders and things that you do well. Go back to your journal when you are in trouble or need help. A tradingjournal is invaluable. I have already described it in more detail in paragraph 8. Read about this if you need to.
- The success you will have in the stock market is mainly depending on how much work you will put down. The famous 10000 hour rule can probably be said to apply here too. Do not forget that you are competing on the stock exchange with large companies that have very competent staff. What do you know that you don’t think they know? Work harder than everyone else! An American colleague and I usually say to each other “outwork your competition”.It’s one of my best edger against those who have more resources or may be smarter than me. Not winning on the stock exchange is not available as an option for me.
Shares & tips – start here
A good place to start to look at shares of stock trading, both beginners and advanced, our stock scanner that generates new trades every day. These work well for both swing trading and day trader tips. It is important that you adjust stopp loss to the style you are going to shop. Carefully read the instructions before you begin to trade using trading strategies. Another great tip if you want to save money while investing in mutual funds. Take a closer look at SAVR.
Shares and trading for beginners
Are you a beginner in shares and trading and don’t know where to start, whether you invest or want to trade short term such as in daytrading. Yes, then it is good to start slow and small. By that I mean that you should not be using much money directly, but you start with a little bit of cash at a time and grow into it as you learn more and more. Trading stocks is not hard if you know what to do. The problem is that there is so much information today that is misleading and outright incorrect. So while it is easy to trade shares and succeed, it is unfortunately easy to fail if you take to you wrong information.
The key is to deal with things that work!
The key above is therefore that you take with you those things that actually works and does everything you can just to find out if the information you have is correct or not. A good tradingtips is to always seek out information that is contrary to your own. That way you can try your own theory or knowledge and see if it keeps despite the information that may say otherwise. Information and knowledge is King in the investment and trading. This is perhaps the best tradingtips I can give. Learn as much as you can in the profession. On Samuelsson’s Report, you will find many articles and information on many different subjects in trading. This applies both to swingtrading, day trading and algotrading.
Day trading tips
There is not so much to add to the list above. The works that I submitted already as good for all types of trading. Daytrading, Swingtrading Forextrading tips, tips, Forex trading tips, terminstrading tip, CFD trading tips and also as algo trading tips.