Due to the high accessibility of online trading platforms, you can become a trader right now without leaving home. All you need is a smartphone, tablet, or computer to obtain the power of stock, forex, or online CFDs trading. Regardless of the instruments you choose, you can’t start without knowing the essentials of safe trading. The markets are overflowing with online scammers, and numerous traders rush into trading without enough knowledge! You don’t want to meet the first or become the second, so read this safety guide by Investous.com experts to minimize potential risks.
1. Use Only 100%-Approved Platforms and Brokers
Although the overall number of trading platforms and brokers available on the web is beyond thousands, only a few of them manage to gain nationwide and global trust. You should do your homework and research the web for reviews and statistics on popular trading platforms to understand which of them will work the best in your case. Then you have to do the same to find a reliable broker. Most probably, your trading platform will already offer you a good solution.
Now, let’s assume that you are ready to start trading and look at the safety rules that are worth following.
2. Develop a Spotless Trading Plan
Creating a trading plan might seem like a dull waste of time, but it’s actually a cost-saving measure. It’s not recommended to start until you specify all the details on paper. This will provide you with a clearer view of the future cause of events and allow you to spot potential risks beforehand. You must cut off as many risks as possible on the planning stage as otherwise, you will end up sacrificing your money for the painful experience you don’t really need.
Check all your hypotheses virtually, pick up the one that seems to be the most successful based on the number of instrument-specific parameters, and run it live. Follow the plan until the end to check if it’s working and make the most out of it. If you fail to follow your well-developed plan, consider it a useless trading session, even if you end up with good profits. You’re not a trader if you can’t teach yourself how to learn things every day.
3. Set Realistic Goals
Starting a campaign with a wish to “become rich” is a failure. You have to specify your goals on paper to realize what you really can achieve in a day, week, or month. The best practice involves daily goal setting, especially for beginners. It has two major benefits:
- Psychological – reaching your daily goals is real and lets you start feeling your actual competencies and have more satisfying moments in the long run.
- Practical – daily goals let you evaluate your progress adequately and see the problems that you need to solve not as something huge and impossible, but as small current issues which you can tackle easily. Short-term financial goals will teach you to see the bigger picture eventually.
4. Use Stop-Losses
If you can’t keep an eye on the market movements all day long, you have to secure your investments with stop and limit orders or trailing stops. These instruments are designed to help you quit positions in time automatically to protect yourself from greater losses.
5. Never Go Double-or-Nothing
Trading is not playing roulette; it’s a real job with rules, causes, and effects. And one of the biggest rules that will keep you from losing it all in a moment says that you have to risk only a 5% part of your trading capital regardless of the situation. Learn how to deal with your money management ratio and do your best to keep it high.
6. Tame Emotions
Money is an instrument and not your safety provider. Remember it and work on thinking of them as a highly versatile machine that has an option to replicate if you find the proper levers to pull.
Using these simple rules, you can keep progressing without burning out in the long run. Still, it’s highly important to keep educating yourself 7 days a week. Consume information bit by bit and thoroughly analyze all your achievements and fails with as little emotion as possible. Eventually, you will learn to have fun!