It is essential to create a solid framework to start trading. Building a robust foundation is an absolute must because when you have it, you can test, alter, and improve it to maximize the successful outcome.
The article you are about to read consists of two main parts. The first one is about gaining substantial knowledge and building a trading strategy tailored to your personality, while the second segment is devoted to the simplicity a successful strategy requires. So, without further ado, let’s get to it!
Know Your Strategy
When it comes to trading, the learning process never stops. Achieving a decent level in this subject requires a considerable amount of structured research. Besides, it is vital to incorporate critical thinking and be able to separate the wheat from the chaff, as in distinguishing valuable information from the white noise of amateur courses and false hopes of instant billion-dollar profits.
Research in trading is similar to gaining knowledge when aspiring to become a professional in any other field. Therefore, a half-a-year timeframe is as unrealistic to become a trading guru as it is to qualify as a doctor. However, six years of studies are not a prerequisite to becoming a successful trader either. What is important is to adopt an approach of gradual skill improvement rather than falling for a trap of expecting instant wealth.
The journey to a beneficial trading practice starts with understanding yourself. It is crucial to trade whatever fits your personality, suits your lifestyle, and what you have a genuine passion for. Realizing what you are willing to dedicate your time and effort to will naturally lead you to an initial strategy that you will further develop.
While there are plenty of social trading platforms, indicators, EAs, and strategies, it is best to focus on building your personal trading style. While a ready-made solution may seem like a shortcut to the top, it is more of a distraction that may potentially make you spend more time to achieve your goal. So instead of searching for a universal solution (which doesn’t exist), build a personal strategy that will work for you.
While it may be helpful to get inspired by other people’s ideas, blindly copying other traders’ actions never works. A trading strategy is the bedrock of your psychology, so you have to be 100% familiar and comfortable with it. Think of it as your safe zone, which you can turn to if things are not going as planned. You can always update your strategy and make it work for you.
A great practice is to look at the traditional indicators and well-established technical analysis patterns. There is a chance you would discover that you are a fundamental trader and have an excellent grasp of the economic landscape. Try different approaches, and at least one of them will prove to be useful. Here’s another pro tip: if you are aiming for consistent long-term success, stay away from the strategies that guarantee to bring high returns since every trade is different.
So if you choose to focus on TA, it is advisable to go through sources like STA-recommended books to identify which indicators fit your trading style and make you feel the most confident about your strategy. Even with plenty of research being done, it is impossible to be right at all times, so don’t be too harsh on yourself if something goes wrong.
Simplicity Is Key
For beginner traders, it is worth keeping the indicators at a minimum. This way, you can avoid getting confused when adding extra metrics to your analysis. Sticking to the idea that every new indicator has the power to bring you additional success is likely to lead to disappointment. Instead, try working with a limited number of technical indicators that are critical to the market to form a clearer understanding. In other words, choose a clearer chart over a cluttered one. After all, clear charts provide simplicity which can be repeated, contributing to long-term trading success.
Keeping it simple is among the most valuable pieces of advice a beginner trader can get. Don’t confuse attention to detail with using intricate indicators. By cluttering the picture, you put your decision-making process at risk of being too complicated and lengthy. Instead, aim to master several simple, focused indicators and let them direct you to patterns that make the choice obvious.
To put it simply, start with understanding your personality and gaining knowledge about trading from reputable sources and proceed by getting a good grasp on a few technical indicators that can be applied for every given scenario. The simpler your charts and trading strategy are, the better the outcome.