Guest Post – Living the Dream
I didn’t like my day job, as a matter of fact I didn’t like any day job I had ever had. That is why I thought about a way to be my own master and earn money in a different way. Today, I trade stocks and currencies from home and make a lot more money than I did from any other job I’ve held, and I don’t even have to answer to a boss.
In this article I will share with you a few important tips to follow from the Forex Trading Strategies 101 site in order to become a better trader and even a pro. So, the next time you trade don’t think it’s about luck or gut feelings – it’s about knowing the right way to trade.
1. Trade with an amount of money that suits you as a trader
You should never trade with all your money because you never put all your eggs in one basket. You’ll have losses at first just like any trader and that’s normal, so don’t panic and see it as a learning curve. You should always trade with an amount of money that you can afford, and that means not being afraid of losing it.
Don’t worry, you won’t lose it all but think about this way: if for some reason you lost all of your trading bankroll but you can wake up the next morning and continue your normal life, that’s your amount to trade with. When you aren’t afraid to lose your money, you trade smart and don’t make mistakes, just like in poker.
2. When trading day begins – Be prepared
If you want to become a pro trader, you should work for at least 2-3 hours each and every day. This means going over the news, feeling the market for the coming day and most importantly, reading and analyzing as many charts as you can in order to find the best stocks and currencies to trade, marking their entry and exit points. This way you’ll know exactly how much money you’ll earn on a successful trade and limit your losses to a minimum if the trade wasn’t successful.
In the long run, you’ll make a lot more money than you’ll lose and will find yourself in profit by managing your trading bankroll intelligently, without risking too much money.
3. Trade with your mind and not with your gut
Making money and a living from trading has nothing to do with luck or gambling. If people told you that you cannot make money from trading stocks and currencies that’s because they either have never tried or traded incorrectly and lost all of their trading bankroll. When you do your homework prior to trading day, you find the best stocks to trade for that coming day, week, etc. More importantly, you limit your losses to a minimum so if the trade was not successful for any reason whatsoever, you don’t lose all your money.
These are the basics of smart trading: when you know exactly when to enter and exit a stock, don’t chase stocks and losses, and work according to your daily plan. Don’t listen to rumors, don’t enter stocks you haven’t worked on prior to trading and follow your plan. In the long run you’ll become more experienced and will make a lot of money.
4. Know to take small profits as well
This is a very important tip. You need to understand when to take small profits as well and not be greedy, because it’s easy to “let it ride” only to see the stock go down further during trading, getting scared and sell in with a loss. It’s okay to profit a little at first, and when you become more experienced you’ll be able to trade with a larger amount of money and make more money. Remember that every time you profit your confidence will rise, you’ll gain more experience and you won’t have lost money – a great combination.
5. Read and analyze as many charts as you can
This is probably the most important tip I can give you. Even during stretches when you don’t trade, read and analyze as many charts as you can. It’s good practice. Write down the entry and exit points and follow the trade even if you’re not trading with real money yet. See if you get it right and if not, learn from your mistakes.
The more you analyze charts, the easier it will become, to the point that you’ll only need a minute or two to decide if you can make money from that stock or currency or not. Now, if you work 2-3 hours a day and only 2 minutes is enough for you to analyze a chart, you can understand how many charts you’ll be able to go through a day. More charts mean more opportunities to make money from various sources.
These are only a few important tips and rules, and if you follow you’ll quickly begin to see nice profits. Perhaps in just 3-4 years you’ll be able to quit your day job and live the dream of making money from home and having time for yourself, your family and your friends.
I would wish you all the luck in the world, but we all know that successful trading has nothing to do with luck, right? Now, it’s time to go for it!
This is a guest post from Nir Zilberman.