We’ve all heard stories about people who suddenly start living lavish lifestyles after getting into trading. Perhaps you have even seen the YouTube ads of “revolutionary” trading platforms that promise you a quick and easy income on the side as passive income. Don’t be fooled, there’s much more to trading than just depositing your money in a trading account and withdrawing your profits.
So, how do you become successful as a trader?
Those who manage to turn trading into a lifelong career are typically people who always stay on top of the latest market news, constantly strive to improve their analytical skills, never let a losing trade discourage them and, most importantly—trade as often as they can.
Nothing is impossible and you can become one of those people too given enough experience. However, you will also need a set of principles to guide you on your road to success. To get you started, here is a list of the 10 rules of trading that virtually every one can follow on a daily basis.
#1: Choosing a regulated broker
Only deal with an established broker and have the right credentials. In other words, the broker should be regulated by a respective financial authority for that country.
Some brokers, especially those located in offshore areas like Belize, Seychelles, Vanuatu, Saint Vincent, and the Grenadines, typically don’t follow particularly strict requirements compared to UK and EU brokers and shy away from any form of regulation, so it’s generally wise to avoid them altogether.
Once you limit your choice to a few regulated candidates with a prudent reputation, the next thing is to compare their trading conditions and choose the ones that fit your requirements the best.
#2: Start to learn the trading basics
As mentioned, you don’t really need a finance diploma to become a skilled trader. What you will absolutely need to learn, however, are the basics of market trading and investing. In case you can’t decide what to do first, you can start by visiting this useful “Education” section.
There you will find free educational video tutorials, handy financial glossary, and insightful articles and lessons covering a variety of topics ranging from forex fundamentals to how to calculate your overnight positions. Of course, you should never limit yourself to a single source of knowledge. Places like investopedia.com and babypips.com are a good starting point, but we highly encourage you to seek out other sources as well.
#3: Draft your plan (and stick to it)
Once you feel confident in your abilities, you can begin working on your trading strategy next. The good news here is that you can do so without spending a single penny! All you need to do is to create a demo account with a virtual €10,000. This will allow you to explore the functionalities of the trading platform (in this case Delta Trading), such as trading signals and technical indicators, at your own pace and in a safe environment that is based on real market data.
#4: Don’t go too big, start small
After trading for a while with a demo account, you might feel tempted to up the game by opening a live account and depositing a big sum of real-life money. Don’t do this! Mistakes in the real trading world can often be costly due to the highly volatile nature of the markets, so the best approach here is to always start small and only ramp up the stakes once you’re confident in your abilities (and even then, only trade as much as you can afford to lose!).
#5: Use technology to your advantage…
Thanks to modern technology, the financial markets of today are equally accessible to professionals and beginners alike. That being said, the trading platform you’ll end up using will likely have a variety of instruments and tools to choose from. While a bit intimidating at first, useful features like chart time frames, technical indicators and trading signals will start to make much more sense as you gain more experience. In fact, you may soon find that you’re using them regularly to identify potential buy and sell opportunities!
#6: …But don’t rely solely on it
While there is no doubt that modern platforms have made life easier for everyone, you should avoid overusing their features in your day-to-day trading sessions. One such example are the so-called “trading signals”, which give valuable insights about what you could trade. Some of these are automated, while others are sent to you by experienced traders (and are usually paid).
#7: Trade regularly
To become a successful trader is to practice each and every day. Make sure to start your day by reading the latest economic news, spend some time analysing price moves, get acquainted with technical analysis reports, and always review your currently open positions so that you can change your trading strategy if necessary.
#8: Never go all-in, it’s not a casino
As we all know, trading CFD instruments on leverage could lead to bigger profits. However, this can quickly go the other way as well. In fact, statistically speaking, losing trades tend to outperform winning ones, which is why you should never invest funds that you can’t afford to lose.
#9: Temper your greed
If your trading session is doing better than expected, but there are clear signs that the market is about to reverse its price action, resist the urge to overtrade and hunt for more profits and immediately close all of your positions. You will agree that it’s better for you to cash a small profit than to earn no money at all.
In case you don’t have the luxury of constantly keeping an eye on the markets, you can take advantage of the so-called semi-automated price orders.
– Limit orders (buy and sell limits);
– Stop orders (buy and sell stops);
– Conditional orders (One-Cancels-the-Other).
You can learn more about the different types of automated orders in our detailed guide.
#10: Keep calm and trade on
Emotions can sometimes get in the way of trading since they tend to cloud our judgement and often lead us to decisions that we later regret. To be a successful trader, you need to first and foremost learn how to remain calm under pressure to prevent doubt and fear from entering the stage and causing irreversible damage to your financial health.
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