There’s a lot of hard work that goes into being good trader and there are plenty of difficulties along the way. Here are 3 important lessons I learned in trading:
No. 1: Cut out emotions
Nobody likes to lose money, but if you’re an active trader, you’re going to be wrong. You can’t let your emotions get the best of you. Develop a robotic ability to take a loss. Once you realize the trade has gone bad, get out without rationalizing or getting upset. The next winner is around the corner. So, take your loss and move on.
No. 2: Cut your losses quickly and let your winners run
Do not hang on to a losing trade, hoping it will bounce back. Not all trades work out, so it is important to cut the bad ones quickly.
Winners tend to move more than you think. Use a trailing stop to get out of a trade if it reverses. Don’t just sell because you have made a certain amount of money.
No. 3: Work hard and learn from your mistakes
Every successful trader had a long learning curve. Hardly anybody starts making money right off from start. To be a good trader, you need to trade, gain experience and learn from your mistakes. Always look for ways to improve your knowledge about trading. You can be sure your results will improve.
Sven Frqnssen