Implementing winning habits in the trading practices is the key to a successful trading career. Winning habits can be gained either through your own trading experiences or by following the winning habits of any other successful traders. The first option could be a bit costlier and unrealistic for you, so the better option might be the later one which will be helpful if you are a new trader or planning to start trading in derivatives.
To become a winner in trading, you need to identify the essence and adhere to a set of guidelines that have been shared by most of the successful traders.
Set a trading strategy and test
The predefined strategy specifies your entry level and the exit along with money management parameters. With simulation and backtesting, you can easily test your trading strategy before risking your real money. If your strategy works in that, you can invest real money or you can change the strategy and test it again till you get satisfied with your trading strategy.
Don’t take a risk that you cannot afford
Trading in derivatives involves high potential risk and you might lose some part of the invested amount or all the money you have invested. The money that you have borrowed or is urgently needed for personal use may not be appropriate to invest. Don’t start live trading, before you understand the information about the risk associated with the trading in derivatives.
Never forget to use stop-loss
You can stipulate the amount of risk that you agree in each trade and accordingly put a stop-loss level in your trades, Ignoring to use stop-loss will risk your money. While trading, you should set an exit level with stop-loss in your every entry. Stop-loss levels of your trade may be different from other traders. Your money management and trading strategy could differentiate your exit level.
Kill your emotions and let your mind works
You should develop a trading strategy based on facts & figures and should not get carried away by keeping high hopes or emotions. You should take a considerable time for fundamental and technical analysis before taking a position and setting exit level.
Make a rule for stopping trade
Put efforts in developing strategies and don’t get deviated by your emotions. If your trading strategy does not work as expected then you can immediately stop your trading and don’t try with more new positions. Make appropriate changes in your current trading strategy and carry out simulation and backtesting for a better trading strategy.
Keep learning from your trading experience
You always need to remain focused on learning each day from the derivative market. The derivative market keeps evolving, therefore, understanding the derivative market and all of its intricacies are an ongoing, lifelong and never-ending process. Rigorous research supports you to learn the change in various aspects, situations, and dynamics of the market and the impacts of them in the market.
Think big and look beyond
You need to focus on the big picture. Losing some positions of your trade should not surprise you. You need to focus more on accumulative profit in the end. Setting a realistic goal is also an important part of trading perspective. You need to develop the money management strategy and set a profit target for a day or a week or a month.
There are many other guidelines to be a successful trader. Each guideline is important, but when you apply them together, the effect gets stronger. Trading is not an easy job and you must follow a disciplined trading strategy and develop patience to follow these guidelines that increase the success rate in your trading.