Getting your trading right once is good. Getting it right a few times is better. But best of all is when you get it right more often than not over the long term – this is your trading success. So how can you maximise this success and really become a trader who not only understands the markets but who can do well in the majority of trades they make?
One thing to bear in mind is that this type of trading – anything that doesn’t involve buying shares and holding onto them for a number of years to make a profit when you sell them – is short term. It happens quickly. This means that you need to have a short term trading plan in place. Going in for the long haul is not going to help you when you need to get in and out of trades quickly, depending on what is happening with them and how much you are willing to risk. After the article, make sure you click here for pro trading tips and tutorials.
In order to be a successful trader you need to have a good insight into the market and hone your skills so that you can win more times than you lose. Of course, it would be wonderful to be successful one hundred percent of the time, but this is not possible – the market is too volatile to be able to predict in this way (particularly when it comes to these short term trades). Besides, part of the enjoyment is knowing that you have worked out the very best trade to take in the very best way.
However, winning is not enough. You must bear in mind that there will be transaction fees to pay, and that these can really have an impact on your profits. Minimising these fees is one – excellent – way to truly maximise your trading profitability. So how can it be done?
Choose The Right Provider
When searching for a provider through which to trade, you need to check out the transaction fees before committing to anything. You might see a provider that seems to be a great choice, perhaps they have tight bid/ask spreads or there are minimal bid-ask spreads (something that the FX world is famous for), but what about their overnight fees? What commissions are charged on transactions? These might be very large, and if you don’t look carefully in advance before spending any money, you could see your profits wiped out.
You Need Good Quality Trade Execution
If your trade is executed poorly then all the preparation in the world isn’t going to help you to maximise (or even make) a profit. You could well have found a provider that offers exceptional transaction fees, but if they can’t do what you need them to do then what’s the point?
There might need to be a trade off between fees and reliability. Check through reviews and look at how the orders are fulfilled – ask questions. This is your money, after all, and your trading career. You want to make it the best you can, and not having orders fulfilled quickly or correctly can have a devastating impact. It is better to pay a little more in fees if it gives you the security of knowing your trade will be executed as you intend it to be.
Look At Your Trading Style
What trading style do you have? Is it helping you to become more profitable by minimising the transaction fees you have to pay? If you’re profits are only just a little more than the fees you are going to owe then you are doing what is known as ‘scalping’ – ie, taking a little off the top. Technically, yes, this is a win, but in the end it’s a lot of work and risk (the more you trade the more you risk) for very little reward.
There are certain things you need to know before you enter a trade. You need to know your starting position. You need to know when you will leave if you are successful. You need to know when you will leave if you’re losing.
However, knowing these things and abiding by them can be difficult. It can be so tempting to stay a little longer in the hopes that something better will happen, even if everything you’ve worked on tells you that it’s not the thing to do. This is where discipline comes in. You need to stick to your trading plan no matter what, no matter what temptations might come your way. In this way you will be more profitable.