Trading Tips

One of the biggest challenges facing new traders is the lack of information and experience when starting out. Without the required knowledge, the financial markets can be especially unforgiving for novice traders. Fortunately, CMTrading will equip traders with the necessary skills and knowledge needed to be successful in the financial markets. We’ll outline some important trading tips and strategies as well as link to great articles to lift your trading game to the next level. 

In addition to gaining knowledge of how to trade, you need to keep up on the latest stock market news and events. From the US Federal Reserve plans on interest rates to the European Union announcing new trade regulations, keeping up to date with major market news will allow us to spot trends as and when they happen.  Keep tabs on indicator announcements, economic, business and financial news. 

It’s important to do your homework. Of course, you can’t track every stock and financial instrument out there so make a wish list of the assets you’d like to trade. Then keep yourself informed about those selected companies, their stocks performance and general news regarding your chosen assets. Scan business news and reliable social media sources to gain as much information as possible. 

Assess and commit to the amount of capital you’re willing to risk on each trade. Many successful traders never risk more than 1% – 2% of their accounts per trade. This will enable you to stay in the game for longer. If you have $40,000 in your trading account and are willing to risk 0.5% of your capital on each trade, your maximum loss per trade is only $200 (0.5% x $40,000). 

Remember, only risk funds you are prepared to lose 

Whether you’re a casual or professional trader, any form of trading requires your time and attention. Day Traders for example will need to give up most of their day. Time is an important consideration and only commit time you have to spare.  

Day trading requires a trader to track the markets and spot opportunities that can arise at any time during trading hours. If you find you can’t commit the necessary time to make these kinds of trades, don’t stress – social trading can greatly assist you. 

When you’re just starting out, it’s important to focus on a maximum of one to two stocks during a trading session. Tracking and finding opportunities is much easier when you only need to focus on a few stocks.  

You can also trade small positions and work your way up. Once you’re comfortable trading and have a trading strategy, start opening bigger positions.  

Hundreds and thousands of orders are placed by investors and traders as soon as markets open in the morning. This triggers price volatility and veterans will be able to recognize patterns and make profits. For beginners, however, this can be overwhelming. It’s much easier to watch the market without making any moves during the first 30 minutes of the market’s opening. 

Later in the day markets are usually less volatile. Then the market will move again towards the closing bell. These types of “rush hours” offer opportunities but it’s safer for beginners to trade in the middle of the day. 

A trading strategy doesn’t need to succeed 100% of the time to be profitable. Many of the world’s best traders may only make profits on 50% to 60% of their trades. This is the nature of the financial markets. The best traders, however, make more profit from their winning trade than they lose on bad ones. They do this through effective risk management practices. Make sure the financial risk on each trade is limited to a specific percentage of your account.  

Having a trading plan is an essential part of any trader’s strategy. This is particularly important when it comes to taking a position in some of the more liquid trading markets (i.e Forex).  

Successful traders have to move fast but with trading tools and a strategy they are able to plan ahead. It is important to follow your formula and refine your strategy. This is much more effective than chasing profits. Don’t let your emotions get the best of you – plan your trade and trade your plan. 

In any given week there are up to 50 news events marked on an economic calendar. Some barely create a blip in the price movement and others can move the markets by hundreds of pips.

In forex trading, as far as predicting price goes, nothing is a certainty and anyone claiming otherwise has never traded the markets or is selling a pot of gold at the end of a rainbow.

Impulsive trading is gambling in another form and it is one of the biggest downfalls for both novice and experienced traders. A trader hits a winning streak on a few trades and feels indestructible.

It is the Central Banks that run the show when it comes to driving the currency markets and Donald Trump.

A market correlation is when two markets move together. This could be in the same direction or the opposite direction. Understanding the how and why it happens is especially useful information that can help you identify the future price direction of an instrument.

Reading the tape (THE PRICE ACTION) is one of the most important tools in anticipating future movement in the markets. The concepts behind setting up Support & Resistance lines is for the purpose of giving a trader the potential pivot points to where a symbol can either bounce off or break through.

As a Trader you want to be trading whatever is “HOT” on any given day, week, or month.

The forex exchange market is made up of individual currencies from countries all around the world. What moves the currency markets is based on the concept of demand and supply.

Going from a novice to a professional is a journey all traders must make. It is up to you if you want to take the long road or the short one!

Going from a novice to a professional is a journey all traders must make. It is up to you if you want to take the long road or the short one!

In Greek Mythology Icarus is the son of the master craftsman Daedalus.

Having limited time to review charts does not mean you cannot make money trading the financial markets. Follow the steps below and get a head start on your trading journey.