Master Trading Right Now With These Simple Pointers and Awesome Hacks
By Space Coast Daily // June 25, 2021
“You must immerse yourself in your work. You have to fall in love with your work … You must dedicate your life to mastering your skill. That’s the secret of success.” ― Chef Jiro
Even though that quote was from a chef who probably knows nothing about trading, the idea still applies to this field. Have you wanted for so long to become a master at trading? You might have been on the same playing field as everyone else, and you’ve just had enough.
It’s no secret that to become a master, you need to find a strategy or technique that works just for you, and that can be time-consuming. The truth is, there’s no one way to learn. You could join several people who shadow live expert traders or turn to courses and strategies for guidance. Irrespective of how you choose to learn, you need to be dedicated to becoming a seasoned expert.
Everyone wants to start making thousands of dollars as soon as they start trading. If it was that simple, who wouldn’t like that idea? However, that’s not always how trading works or even life. As a matter of fact, even having direct access to an expert doesn’t guarantee anything. If that’s what you’ve always thought; sorry, but you’d need to change that mindset. Becoming an expert is a combination of will, determination, and knowledge among other things.
In this guide, you’d discover pointers and hacks— what it takes to become a master trader.
1. Do You Know the Basics?
In any field, attaining mastery begins from proper knowledge of the basics. For most people, it would take only a few hours of reading for them to acquaint themselves with the basics. Bear in mind that this is just fundamental knowledge. It isn’t all that you need to know. If it was, who wouldn’t know how to trade? Trading would be quite simple.
Assuming you only knew how to read the French alphabet, is there any chance you will be able to speak the language?
Like learning a new language, what is needed is to be fluent in the language of the charts such as:
■ trading ranges
■ support and resistance
■ chart patterns
■ candlesticks or OHLC bars
■ time frames
Other basic things you need to understand include:
■ the impact of interest rates
■ the impact of the market and sector indices
■ the interaction between different equity markets;
■ the interaction between equities, bonds, currencies, and commodities.
Even after understanding what these mean, it would take hours of constant practice, chart analysis, and application of various theories for you to reach any form of mastery. That could be the reason why many traders go after indicators in their search for a shortcut.
2. Ensure You Have the Necessary Tools
Tools help you get a handle on the trading art. Prior to thinking of a strategy, you need to have a reliable forex trading platform that would provide you with precise quotes. This review at https://www.trusted-broker-reviews.com/iq-option/ mentioned that you need to do a background check on the platform you intend to use. Check the customer feedback for pros and cons. They go as far as listing regulations, ratings, number of assets, and so on.
Considering you’re still a beginner trying to hone your skills, you can start with a demo account — most trading platforms usually have this feature for your convenience. The amazing thing about this simulation feature is that both beginners and people are trying out a more advanced trading strategy.
Check out some tools you’d need for forecasting, analysis, and the general trade path
The correlation tool is one a trader should have. It shows the relationships between currencies having a rating from +1.0 to -1.0, i.e. a perfect positive correlation to an inverse positive correlation. Traders can make informed decisions knowing the correlation of the currencies.
Economic News Calendar
Trading is built on the news — follow the news closely, and you could make a profit or lose. The news calendar, because it contains data such as the future of the market, world events, previously released outcomes, and economic information, helps traders in their forecast. It usually also contains political news and changes in policy that could disrupt the exchange market.
Much similar to the economic news calendar, the Financial Newswire focuses more on business and news relating to finance. Considering one of the key factors in currency valuation is the interest rate, it’s vital to be informed when there are financial policy changes around the globe.
Think of a trade journal as your calendar, it allows you to keep a record of all that goes on in your trading career. It would provide you with an overview of how far you’ve come to see if you are making a profit, losing, or breaking even. It also helps to practice control and discipline yourself. You know exactly how much you have invested and how much you’re looking to earn.
3. Manage Your Risks
To become a master trader, you must know how to manage your risk. How can you achieve this? Here are a few things you can do.
Learn How To Use Stop-Losses
Stop-losses would help ensure you don’t lose all money in a single trade. You can imagine after placing a trade order with your stop only to find out that you are being taken out just before you arrive at your big win. The best option is to set a stop loss.
It is basically setting a number for the market, as soon as the market hits that number your trade would be exited automatically by your trader on your behalf.
Modify Stop-Losses When the Market Situation Changes
When the market ebbs and flows, stop-losses increase, thereby generating volatility, which in turn gives higher highs and higher lows. That is an avenue for higher profits if you’re a smart trader. You should modify your stop losses as a reflection of the market. What you can do correctly with a fluid stop-loss number is to adjust the minimum number based on the movement of the market.
Know When to Move Stop-Loss
This is pretty direct, look for a high or low with two candlesticks to the left and two to the right, which would be higher or lower from that position.
■ A high commonly have two lows to the left and right
■ A low commonly have two highs to the left and right
4. Basket Trading
A very crucial strategy for anyone striving to become an expert, basket trading, allows you to save time, multiply profit, involves choosing a currency and placing it into one of two groups: the control section and the pegged group.
The former is when the currency in a pair like the USD is located on the left side of the slash of the currency pair. For example, USD/JPY and USD/CHF. The pegged section is when your currency is on the right side of the slash, like JPY/USD, CHF/USD.
The first thing to do is select a currency pair to trade with. Once that is done, you can have your control and pegged baskets. The next process is to carry out research on your preferred currency. The outcome of your research will give you information on how the currency is performing against the currency it is paired with. If you split the currency pairs into baskets, you can trade bearish and bullish moves simultaneously.
For instance, you want to trade the dollar currency and your research has shown that the USD is strong against the Swiss Franc, but not at all that strong against the Japanese Yen. You would proceed to create a basket trade that allows you to purchase the USD/CHF pair, and sell the USD/JPY.
That means you can go bullish against the Franc and bearish against the JPY. When you basket trade, you have the opportunity to make more profit.
Locate Your Basket data
The key to becoming successful by trading in baskets is to perform research on the currency you have selected, which you can begin by studying candlesticks and using your charting software.
When a currency is increasing in strength, study the charts to confirm the bullish uptrend. If the currency’s control of the currency pair increases, it would have extra control.
5. Utilizing Forex Options
By forex options, we mean an agreement where a trader can buy a particular pair of currencies at a given time. The agreement further includes a price margin that is agreed upon by the two sides that prevent it from being subjected to changes in case the price should shift.
Forex trading is tricky because while Forex options can work for you, they can equally work against you. The latter is what seldom happens when the trader works with a volatile currency pair. Many of which are from countries that are experiencing political instability, including other forms of economic setbacks.
To become a master trader isn’t a day’s job, nevertheless, it is not impossible and is worth all the effort you would put into it. You need to, however, start working in that direction from now and stop procrastinating. You’d be one step closer to becoming financially free.