I’ve been trading for over 29 years, and I’ve worked for leading banks and brokers. Over the last 20 years I’ve been trading my own funds as well as teaching Traders in over 109 different countries.
So, regardless of where you’re based, and whether you’re trading shares, FX, Commodities, CFD’s, using Financial Spread Betting or Exchange Traded Funds, let me share some Financial Trading Tips on what winning financial traders do and how you can make money trading financial markets.
Winning Traders trade what they see
Firstly, winning Traders trade what they see, and not what they think.
If the price goes to 60, then 61, 65, 70, it’s going up. It doesn’t matter what the indicator or news is saying, or what you THINK should be happening. The price tells the truth and should always be obeyed. New Traders often lose large amounts of money trying to pick up at the top or the bottom. This is risky, and you don’t need to do it to succeed. So, unless you have psychic powers, stick to a trading system and don’t guess.
If your trade is not going as planned then close it and move on.
Don’t get carried away by technology
Second, don’t get carried away by technology.
It’s easy to be blown away by all the great software, on-line trading, real time data, charts, business channels, apps and bells and whistles. The truth is, less is more, and information overload makes you a worse Trader.
The more complex your system, the less chance it’ll work. The majority of technical trading indicators are a total waste of time and money. You don’t need to invest in expensive trading software that claims to predict the markets. The important factor when you’re trading any market is the price.
Over my career the majority of my wealth has come from trading trends many lasting weeks, months and even years. Many parts of the media want to make trading sound “exciting and fast moving” truth is that may make good T.V. but it’s not the way to make money.
We’re dealing in unknowns and factors that are out of our control
Next, be aware that in trading and investing we’re dealing in unknowns and factors that are out of our control. All you can control is the amount you risk on any one investment. So, however sure you are that XYZ is going to soar, make sure that you only invest a percentage of your trading bank in case it doesn’t turn out the way you hope. Then you can live to fight another day.
If you money manage and keep your loses small and your wins big, then you can lose more times than you win and still make money.
When I was a broker I had access to thousands of client accounts, and I watched how they traded. Most cut winning trades very quickly and let losing trades run in the hope they’d turn around. You can’t afford to trade and invest like this. If it’s not working out as planned, cut it and get out. Taking a small loss now is much less painful than taking a big one later.
And, finally, don’t have a directional basis. Many people want to either always buy and go along with the market, and others are bearish and want to go short.
The best Traders are neutral and happy to trade markets either way. So, for example, I might have stock like Apple for many months and it’s an up trend. Then, when it breaks the trend, I’ll sell and go short, allowing profit from Up and Down moves. I simply don’t fall in love with a stock or a currency.
Those are just a few tips taken from my course. If you’d like a free copy of 10 Top Tips The Professionals Don’t Tell You, and to find out more about my course – which is available worldwide – then go to www.thespreadtrader.com. You’ll discover how to put the odds in your favour, and get the benefit of my 29 years of experience in trading Currencies, Shares, Indices, and Commodities.