There is a famous quote which says “In Trading what is comfortable is rarely Profitable.” Trading means buying and selling of assets and securities and with proper discipline and right skill set a trade can be made Profitable. Here we will discuss 7 ways or tricks which can make your Trade Profitable.
1. Positive Attitude
- The first lesson the trader should learn is to have positive attitude for whatever he does. One should realize that mistakes are part of life. And one should learn from the mistakes. Trader should analyze and focus and then take a decision.
- There are lot of instances where things wouldn’t work according to your choice. The price fluctuations during trading can bring in mixed thoughts and confusion. But keeping your mind cool and calm is the mantra.
- Positive attitude always helps you to take right decisions which can turn your trade from loss to profit. Positive thinking and personal development are important things in life and it is not just about trading in all aspects of life one should have positive attitude.
2.Have a Trade Plan Ready
- Trade plans are just like roadmaps. It shows you a pathway for a successful trade. While making the Plans one should keep the following points in mind like risk taking capacity, mental preparation, Goals, and set entry and exit rules.
- Such key points helps the trader to execute his trading activity smoothly. Investors can customize their plans according to their need and personal objectives. Trading plans are quite lengthy and detailed. Short term and Long term investors usually use a tactic trading plans to invest because tactic plans are much detailed.
- Investors make a trade plan after going through researched documents and past trade performance charts. Plans shouldn’t be changed every time unless a real better offer is discovered. If the second plan turns out to be a better option then the first plan should be scrapped.
- A trading plan also includes which securities should be included and which securities is not acceptable.
3.Observe and Capture the Market Movements
- A good trader is the one who observes market movements very carefully. Traders should use stop loss so as to protect their investment. Traders need to remain focused. It is important to remember that understanding the markets is very important as markets are volatile and things can become a mess anytime. So staying focused and vigilant is very important.
- Even if you already have the right mindset, you need to have knowledge about the basics of the markets to understand the reasons behind certain price-moves. In addition, online trading courses are also a great way to increase your knowledge about the markets.
- There are nowadays lot of websites and apps that teaches trading wherein you can trade and learn through their demo lectures.
4. Don’t Let Losses Get Out of control
- A common mistake among beginners in the market is the way they manage their trades that are creating loss. Usually, traders wait for a losing trade to become profitable again, as they don’t want to close the trade in loss. As you can see, emotions are coming in between the rational trading decisions which can be very costly in the long run.
- Instead, trader should try to manage losing positions like a professional trader. If one of their trades is slightly in minus, signaling that their trade setup isn’t playing out as expected and instead of waiting creating a huge loss, successful traders will close that trade and move on
5. Think long – and short
- Trading opportunities are present in both rising and falling markets. Its human nature to look for chances to buy, or “go long” in the market. But if you’re not also open to “going short” in a market, there are chance that you might unnecessarily limit your trading opportunities.
6. Learn from margin calls
- If you’re hit with a margin call, it’s probably because you’ve stayed with a losing trade too long. So, consider treating a margin shortfall as a wake-up call that you’ve become emotionally attached to a position that’s not working as planned.
- Rather than transferring additional funds to meet the call or shrinking your open positions to reduce your margin requirement, you may be better off exiting the losing position completely. As the old trading expression goes, “cut your losses,” and look for the next trading opportunity.
7. Remind Yourself that the Market Doesn’t Owe You Anything
- One common mistake that many traders continuously make is doing overtrading in the market. Especially after a trade goes wrong, some traders start to chase the market for trade opportunities, only to accumulate huge losses by the end of the day. This is not how the market operates. One should remember that the market doesn’t owe you anything. Some days there are extremely good trade setups, and the other days there might be nothing. Don’t feel angry at the market once a trade turns into a loser. Remember that in markets emotions doesn’t work. Only practical and experience helps in successful trade.
Don’t get so wrapped up in market action that you end up losing your actual vision for the market. It is your duty to monitor your working orders, open positions, and account balances. But don’t hang on every uptick or downtick in the market. A smart investor is the one understands what market signals are, tries to take opportunity and decides his stop and sticks.