There’s no way around it, playing the markets is a form of gambling. You will lose trades. However, take a level headed approach, and you’ll be heading towards becoming a long term trader, instead of a short-lived gambler.

Don’t Run A Stop Sign! – Use Your Stop Loss

Use a carefully considered stop loss on every trade. And, stick to it! You put it there for a reason. Yes, there is a default stop loss applied but that can be 80 or even 100% of your stake. Even if you think your trade is going to keep moving in the right direction, think about the potential implications of upping your stakes and moving your stop loss. Take a deep breath, count to 10!

One Size Does Not Fit All – Develop Your Own Trading Strategy

Our circumstances are all different; money, time, commitments, responsibilities, even our individual psychology. Any ‘guaranteed ‘winning strategy’, even if it is a good one will not ‘fit all’, bear this in mind, especially if you are going to part with money to sign up for a strategy program. A trader with $500k in their account is obviously going to trade differently to someone with $50!

Easy On The Gas! – Leverage Can kill

A beginner using high leverage is like a learner driver getting into a Lamborghini, stamping their foot on the gas, overshooting the road, and ploughing through a fence into a field full of bullocks. Easy on the gas my friend!

Leverage – How much?

There is no sure-fire formula for applying leverage (a.k.a. Risk Level), as everyone’s circumstances are different, however, consider the following. If you open a trade with $25 at 400:1 leverage, and the trade closes 50 pips up you win $49 (50 minus 1 pip spread) – 200% profit. Excellent.

If you open the same trade with $200 at 50:1, you get the same profit – $49. BUT, if the trade dips before it rises, there’s a good chance your $25 trade will be wiped out, whereas with a margin of $200, you are covering the dips. This is the difference between gambling with $25, and trading with $200. Sure, a 200% mark-up sounds impressive, but being wiped out in an hour doesn’t.

Get Trendy!

The trend charts are there for a reason, use them. If you can’t spot the trend you might not be able to see it because the time frame you are looking at is too small, change from 14 hours to 7 days, and then again to 30 days. Or, it could be because there isn’t a trend.

Duck That Trade!

Don’t open trades you’re unsure of – duck them. Instead, open an imaginary or demo trade, with imaginary money, but follow it, and record the outcome. You don’t have to trade everyday, take a break.

Start Small, Think Long

Start with small trades, even if you think you’re onto a winner markets can change quickly. Don’t up get wiped out at the start of the race, it’s a marathon, not a sprint! The first stages of learning to trade are crucial, survive them with money left in the pot and you’re on your way, and the most successful traders are those who manage to stick around.

Market Dead Or Asleep? Let It Lie

If there is nothing going on take a break. Its highly unlikely that staring at the charts will make those lines or candles move – in fact obviously it’ a physical impossibility! But I think you get the picture, the markets do have static periods – so either spend you time revising your history, or doing some research, but don’t sit there willing something to happen. Or, look up an old friend! Write a letter! People love that stuff!

The Devil’s In The Detail: Check Your Trade Options

Double check everything – i.e. don’t rush and make mistakes. Double check that all the ‘Trade Options’ in your trade are set as they should be – particularly the stop loss. Yes, seconds can count in a fast moving market, but that is exactly why you should spend that extra bit of time double-checking.