I recently wrote a blog post on my Business Leads Tools website about smart investing, you might want to go over there to check it out at the end of this post. The reason why I bring it up is that trading the markets properly is a great way to smart investing.
Profitable Trading Strategy
There are many ways to trade the markets i.e. forex trading, option trading, spread trading and a few others that you can think of, binary comes to mind also. The important thing to note is to find a profitable trading system that works for you and learning the strategies that will make you successful.
It is common knowledge that many people lose money trading. For many who trade the markets, be it options, binary, stock, currency, scalping, day or swing trading, whatever the trade, lose their money; and the reasons are several, but I will name the ones I have uncovered over the years.
Reasons Losses Occur
They are namely:-
1. People don’t understand the trends. Surprising as it may sound, a lot of people follow what is on the news and what the public are saying i.e. they place their confidence in general opinion to make a trade and this is a big mistake.
2. Many people do not understand the trading strategy for the platform or for the type of trade they have chosen. It is important that you understand the platform you are using and the trade strategy that you are undertaking.
3. To have a successful trade strategy you need to at least follow three or more indicators, but some people just follow one indicator i.e. the trend is up or the trend is down. However, too many indicators also can lead to unsuccessful trades.
4. Another major reason I would say why 96% of people lose their trades, and this is one that I discovered recently, even though I always suspected it, I didn’t understand exactly what was happening until I came across this information I’m about to share with you in my research. Why 96% of trades fail is because of the banks, the big players. You need to understand what they’re doing. When they’re in a trade and when they’re out of the trade. Remember me mentioning herd mentality earlier on in this post? You need to do the opposite of the herd, but not just doing the opposite you need to be strategic in your trades.
5. Another reason people fail is if they spread themselves too thin. I have heard it said occasionally that you must trade a small percentage of your bank. However, the common consensus is only between 5% to 10% of your overall trading bank should ever be at risk at any time in any trade – no matter how confident you are of the trade.
6. Any trader who understands proper trading strategy understands that you must ride your profits and cut your losses. Unfortunately, many Traders do it the other way round, they cut their profits short out of fear and allow their losses to run in the hope that a reversal is around the corner.
7. Always write down your trades. Make a written note of trades you have entered, your losses, your profits and why you entered the trade. So that you can review your trades and reasoning behind it with the aim of getting better at a strategy and learn what works for you and what doesn’t.
8. This may seem trivial, but never celebrating your wins is one sure way to lose all your money eventually. Get in the habit of celebrating when you have made a profit, however small, celebrate it.
9. Many failing trades is as a result of not understanding seasonality. When you fail to understand what period you are in or what sector is doing well or not doing well at any given time when you enter your trades, it will lead you to failure and loss.
10. Not following the big money (also known as smart money). No matter how much you have or where you place your stop loss, you will be consistently losing money if you trade opposite to what the smart money is trading. Not knowing what the smart money is doing will cost you, I know it well!
I have been trading for over 10 years now and I have experienced great loss and I’ve also experienced great wins and right now I understand where I have been getting it wrong and what I should be doing. Fortunately this knowledge leads me to understand how these principles work for me and my consulting clients. If you want help applying anything I have shared with you here and want to know more then reach out to me for a consultation on how you can get started in my profitable trading strategy system.
I’ll show you how to find the right trades, what signals work best for options, stocks and forex trading so you can enter profitable trades on a consistent basis and cut your losses using a stop loss. Learn how you can profit from your trades to be able to make a passive residual income trading the market from your home.
Contact me here: firstname.lastname@example.org
If you have come across my post not in need of trading strategy consultation, but have benefited from the information I have presented here. then click on the banner below to learn about a very profitable tradind strategy for those who know what they’re doing.
Whatever you choose to do take care and trade smart.
Follow the link to learn all about my guide to Smart Investing