According to a study by MagnifyMoney, around 40% of investors have lost sleep because of worries about the market, while 30% have even cried. This could happen because of a lack of knowledge and experience.
You have probably already read numerous tutorials on how to trade, what indicators to use, and how to manage your portfolio to become a successful investor. But if you haven’t found success yet, check the tips below. Maybe these five recommendations will change your trading path for the better.
1. Don’t blindly follow other traders’ advice
There is standard advice, especially for cryptocurrency traders, to subscribe to social media such as Twitter, Facebook, and Reddit and read users’ comments. The idea is to follow the most popular groups to be up-to-date and check reviews on various companies and projects.
Some traders misunderstand this recommendation. They follow trading signals the community members provide. It’s very dangerous because you don’t know how much experience they have. Whether they are successful traders or scammers. Even if they post the results of their trades, it doesn’t confirm they are professionals.
2. Don’t ignore your unique situation
Every trader should have their own plan and strategy. Only you know how much funds you have and how often you want to trade. It’s a common mistake to follow other traders without knowing the conditions of their trades.
Make a plan and decide when, what, and how much you want to trade. Develop a strategy for every possible trade and always stick to it. Of course, you can manage trades regarding the market circumstances, increasing and reducing a position size and trailing take profit and stop loss levels. However, you should do it cautiously and only after you have enough experience.
This tip also relates to the previous one. Don’t change your decision because of someone. Even if you read that someone else placed a different trade, don’t change your positions.
3. Don’t regret every cent you’ve lost
A common problem for beginner traders is that they regret losing every cent. It mainly happens when they could earn a little bit more but closed a position earlier. Large traders aren’t familiar with this problem because they deal with considerable sums.
Change your mind and behave as a large trader. First, it will prevent you from emotional imbalance. Second, when you think big, you become “big.” It doesn’t mean you should forget stop-loss orders and spend all your funds. Just don’t regret it if you lose some.
4. Don’t spend all your funds
Every financial operation is risky. Even when you deposit your funds in a bank account for interest, a bank may go bankrupt. Therefore, you should be ready for losses and spend the sum you can afford. Divide your income into three parts. Spend 40 percent on daily expenses, including food, clothes, transport, etc. Spend 30 percent to pay your debt off. Spend 30 percent on investments.
You should continue living your normal life even if you lose in investing.
5. Don’t follow analytics blindly
It’s vital to improve your knowledge and skills by reading expert opinions. Still, your task is to learn what indicators they consider, what metrics predict a particular price direction, and how different events may affect an asset’s price. Don’t follow price predictions, and don’t base your trade decisions on someone’s projections. Analysts change their minds every time the market doesn’t follow their forecasts. Learn how to analyze the market and base decisions on your own conclusions.
Even if these tips sound simple, many traders forget about them, focusing on difficult things. If you implement them step-by-step, you are more likely to succeed in your trading career.