30 rules followed by professional traders

Earning substantial profits from trading is harder than it looks.

It is estimated that 80% of traders will ultimately switch to a different hobby due to loss. Brokers don’t like to talk about the failures, because that would make the world of trading that much more scary. Instead, they focus on the successes of traders. Despite this grim news, there have been many documented successes that accompany trading. The fine line between success and loss boils down to strategy. Those with a more honed in strategy will find more success rather than those hoping to earn profits based on luck. In this article, we’ll outline the top 30 rules that professional traders implement to earn a profit. Follow these rules and you’ll begin to separate yourself from the 80% and lean towards the small niche of successful traders. To learn additional information about investments, invest in your future with TopBrokerstrade.com.

  1. Stick with it.

There is a learning curve associated with trading, just as there is with any new hobby. It is inevitable that you will experience some losses, that’s part of the game, but that shouldn’t discourage you from honing your craft. Stick with your path of learning.

  1. Ride Solo

When you’re new at something, it’s easy to fall into the trap of “majority rules,” but this can be dangerous. Steer clear of discussion boards, such as Reddit, as they can steer you the wrong way. Trust your personalized strategy.

  1. Refine your strategy

A strategy that works one week, may falter the next. It’s important to continue refining your strategy to ensure you stay ahead of the curve.

  1. Be thorough

After your diligent research and strategy planning, you must implement your plans effectively. Simply investing in random markets will not result in profit – use the strategy you’ve planned for.

  1. Avoid popular investments

Popular investments may pan out (take for example Gamestop), but you risk entering the market too late. Popular investments are also inherently more volatile and at risk for losing value.

  1. Make rules, and follow them.

Before executing trades, make rules for yourself. Maybe you will make a rule to sell your shares once it hits a certain profit, or maybe the rule is that you only execute trades at a certain time. Regardless, make rules and stick with them. When you start breaking your rules, you risk greater losses.

  1. Avoid Market Gurus

At the end of the day, it’s your money at stake, not theirs, so they can’t be trusted. They may sway you towards an investment that will increase their profits, not yours.

  1. Balance Art and Science

While a majority of trading falls onto your strategy, there is also intuition that goes into the trade executions. Become one with your mind and trust your gut.

  1. Don’t become too biased

If you fall in love with a particular investment too much, then you risk flawed decision-making due to bias.

  1. Separate business and pleasure

If there are issues in your personal life, they will eventually carry over into your investment life. Investing is not a get rich quick scheme, so if you are struggling financially in your personal life, it can impact your decision-making. Keep the two separate.

  1. Cut your losses

The mentality of “breaking even” is a slippery slope, because it can lead to impulsive trade executions with higher values. You risk major losses if you go in with a breaking even mentality.

  1. Tune in to warning signs

Major losses typically have many warning signs that traders ignore. Tune into these warning signs by continuing to monitor the market. Over time you’ll become more attuned to early signs that indicate the market conditions are changing.

  1. Tools are just tools

Don’t let the tools in your trading platform make the decision for you – they are just tools. Tools can help supplement your trading strategy and plan, but ultimately, it’s you that’s executing the trade.

  1. Never stop learning

Once you enter the investment world, you’ll want to continue to listen to podcasts, read books, and research the market. The trading world is constantly changing, so stay up to date.

  1. Personalize your choices

Some trading platforms allow you to copy trading strategies from others, which seems appealing, but beware. Your investment heroes have losses just like anyone else. Use your skills and knowledge to remain on your investment journey.

  1. There is no perfect formula

Forget the fantasy that there is an ideal trading formula that will elicit ideal results behind every trade. Each trade execution requires thoughtful and strategic planning.

  1. Remember the trading days

Trading is not a 24/7 world, as the market is closed on holidays and weekends.

  1. Nothing is guaranteed

Trades can seem to be going well, but that money isn’t officially yours until you’ve closed out. Therefore, don’t assume you’ve made a profit before closing out.

  1. Simplicity is key

At the end of the day, trading is understanding the concept of buying low and selling high, all other components are secondary. Technical indicators are used to confirm or deny what you see in the market.

  1. Loss is normal

As we’ve said, loss is a natural part of the process, so come to terms with the fact that you will lose some money eventually.

  1. Reinforcement can be tricky

If you rush a position and win, this can reinforce that rushing is okay. This type of mentality can lead to major losses, so beware.

  1. Take advantage of simulators

Many trading platforms come with demo accounts that allow you to practice before executing real trades. Take advantage of those to test out your strategy.

  1. Consulting is okay

While earlier we said to avoid discussion boards, that doesn’t mean you have to do this entirely alone. Seek out a trusted source whether that be a professional consultant or friend who also trades.

  1. Choose an investment opportunity that you’re interested in

If you begin investing in Forex but dread the research involved in currency values, then you likely won’t succeed in the long run. Choose an investment area that you enjoy researching.

  1. Never put too much capital into a single trade

Experts recommend trading 1-2% of your dedicated trading capital. Using small amounts prevents overtrading and major losses.

  1. Always use a stop loss

Using a stop loss helps reduce the amount of loss on a security position and can act as a safety shield.

  1. Treat trading like a busy

The hobby mentality prevents growth in learning. Dedicate set hours to your investments to ensure that you have the time to research.

  1. Trade for the long run

Short trading will not result in huge profits. Set long term goals.

  1. Master one strategy at a time

There are many strategies for trading, so as you learn about them, master one at a time to prevent confusion.

  1. Have fun

Finally, have fun. While trading is difficult and anxiety-provoking, it’s important to have fun and enjoy what you do.

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