To increase the rate of profitable trades, you should work on your trading skills. Is it enough to trade daily to become a professional trader? The answer is no. Learning from mistakes is a good strategy, but not the only one. Besides, there are other things you should consider if you want to grow as a trader. In this article, we will tell you what you should do to be professional in trading.
Below you will find four tips related to all trader types and one special recommendation for crypto traders.
#1 Educate Yourself
To become successful in any activity, you need to be equipped with in-depth knowledge. There is a huge variety of educational materials, books, articles, and tutorials that will help you learn new strategies, technical tools, and types of analysis. Still, you should be careful as not all the information on the Internet is relevant. Choose your sources wisely.
If you have the knowledge, you increase the number of opportunities where you open a good trade and avoid being dependent on others’ opinions. It’s not forbidden to check experts’ trading ideas. However, you should always have your own perspective and follow it if you disagree with expert recommendations.
#2 Learn the Specifics of the Crypto Market
Most recommendations in this article work for all trading assets. But if you trade cryptocurrencies, you should improve your knowledge and skills in an additional specific area.
If you have no idea how the crypto network functions, what factors affect the price of a coin, what cryptocurrencies are more reliable, you follow the market euphoria of Bitcoin’s enormous surge, you will fail.
If you don’t practice, have no idea about market volatility, historical price movements, and you buy whenever an expert says the cryptocurrency will jump now, you will fail.
A crypto market is highly volatile. Significant market fluctuations lead to increased risks and a higher probability of mistakes. Try to get used to analyzing the market and get ready for any unusual situation.
And if you are keen on crypto assets, never neglect security, a crucial point of crypto trading. Crypto traders are recommended to learn how to distinguish a scam coin from a good one. A low price of the cryptocurrency is not a sign of a scam. Still, you should avoid entering the trade just because you want to buy low.
Moreover, it’s vital to understand how to protect your funds. Data encryption, two-factor authentication, and a reliable platform are the main things you should consider when trading cryptos. For instance, the Redot website provides a high degree of security.
#3 Practice Your Strategies
Of course, you won’t succeed only by reading articles and educational materials. You should apply your knowledge to the real market. One strategy may seem like the simplest one but turn out to be complicated in real market conditions. A pattern that is perfectly drawn in the educational image doesn’t look the same on the chart. The chart varies regarding securities, timeframes, and periods when you trade, and that’s why you can fully understand the trading theory only by practicing.
Imagine you train a lot and get a six-pack. But then you have to make a long break. When you are back to the gym, you will gain the six-pack fast as you have muscle memory. The same rule applies to trading. When you train enough and know what you do in a certain situation, you implement your skills quickly, even during high volatility.
Trade different assets on a consistent basis on various timeframes as securities differ by their liquidity and volatility. For instance, the crypto market is highly volatile, while Forex majors are quite stable currencies.
If you don’t practice, you won’t see which way the wind is blowing. It will lead to missing opportunities, wrong decisions, and losing trades.
#4 Record Your Actions
We are wired to quickly forget negative experiences. It’s generally a good quality but not in trading. Of course, it won’t help if you focus on your mistakes. Nevertheless, you should remember them and work on them. Don’t be afraid of making mistakes, afraid of repeating them.
Trading daily, you won’t be able to keep all the mistakes in mind. Thus, you should record them. Every professional trader has a trading journal where they write down all profitable and failing positions. Entry, Stop Loss, Take Profit levels all need to be recorded. Also, you should make a note of what fundamental or technical factors made you open a trade.
#5 Work, Don’t Play
If you think of trading as a game, you will never turn into a professional trader. Any activity you want to succeed in should be taken seriously. You work every weekday, you plan your actions, you take courses to get a promotion. All these steps should be a part of your trading career.
Also, you should be careful with your funds. If you’re going to a casino, you have the money you are ready to spend. You don’t plan to earn; you understand that a risk of loss is high, and you accept that as you go there to play. But it’s not the same for traders.
If you are serious about trading, you should remember about money management. Never risk more than you can afford. Don’t add money in a losing trade. And if you know how to manage your funds, you won’t go bankrupt even though your trades fail.
It’s not difficult to start trading, but it’s a challenge to grow from a newbie to a professional trader. Only knowledge, plan, daily practice, and serious attitude to the trading activity will help you become a professional trader.