The 3 Benefits of Currency Forex Online Trading



Any successful trader knows how fun and profitable stock trading can be. The experience of taking a profit from something as celebrated as the New York Stock Exchange or NASDAQ is as exciting as it gets. These trading arenas are the most celebrated in the World and to actually profit from these markets is a feat in itself. I don’t have to tell most successful traders that they are competing with some of the most successful floor traders the market has to offer when the invest their money in the markets.

What about the new trader just starting out with a newly funded trading account? I’m sure any seasoned trader can look back and remember how that felt…exciting to say the least. If we are honest with ourselves we would also remember how many mistakes we made along the way to becoming successful. It’s a fact that most new traders will lose all of their money before they finally figure out how to trade successfully. They come to the realization too late that the golden rule of successful trading is gaining enough knowledge to think for themselves.

The web is littered with obstacles that are designed for nothing more than to part unwitting investors and traders from their money. Couple that with the fact most traders soon find out trading is isn’t as easy as following an analyst rating and become frustrated. This isn’t the 1990’s anymore and the stock market has reverted back to a more traditional growth rate and the likelihood that a new trader will soon find themselves over their head is very high.

So what can the new trader do to prepare for trading successfully? There are a few golden rules that I recommend any new trader follow before and during their initial stages of growth as a trader:

Learn to think for yourself - Take the time to learn your method of trading whether you decide to trade as a technical or fundamental trader. Read all you can and study often. Take a trading course, read books, get the proper charting software and look at charts nightly.

Stay away from stock message boards - When starting out it’s hard to decipher honest observations from hype. “Pump and dump” schemes flourish on internet message boards and the new trader can become easy prey.

Don’t over trade - It’s easy for the new trader to actually trade too much. Stay in your investments until they run their course. Don’t jump from one stock to another trying to achieve quicker profits.

Use a stop loss - Many new traders stay in a losing trade way too long. Stick with a hard and fast stop loss rule, I recommend eight percent.

Try paper trading first - Paper trading is a great way to test your trading strategies and build confidence. Wait until you’re profitable on paper before committing money to the market.

Keep your emotions in check - The reason many traders lose money is because they are afraid of losing money. You should have a strategy and a stop loss rule that you can rely on. Cut your losses at your stop loss and let your profits run.

Trade with the market - Watch the S&P 500 or the NAZDAQ and trade with the trend of the markets. If the markets are in a decline, don’t place long trades or go short. If the market is in an uptrend don’t trade short and stay with your long positions.

While the above list is by no means an exhaustive list of the rules you will need to follow, it does cover the most common mistakes made by new investors. Take your time; learn all you can and you might just find yourself becoming a very profitable trader.

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