1. Have a strategy
When you decide to start making your fortune in online trading, you need to understand that real results come from consistency. In order to see if a certain strategy is effective or not (at least in your case), you need to persevere with it for at least a full year. In other words, whether you choose day trading or position trading, swing trading or scalping, you shouldn’t give up after the first failure. At the end of the day, a failed trade deal is a central part of online trading, which is something we’ll discuss a bit later. On the other hand, sticking to a strategy that seems to only lose your money is not something a lot of people are capable of.
2. Stop the order
In order for your online trading efforts to be efficient, you need to find a way to remain profitable even with a negative number of successful trades. In fact, by setting your stop loss order at 1 percent and your gain order at 7 percent, you can remain in a net plus with as little as 25 percent of successful trades. Sure, this may sound a bit discouraging for those who hoped for a The-Wolf-of-Wall-Street-like scenario, however, this is just one of many myths you will have to debunk on your way to the top. For this to work, however, you have to learn how to set these orders.
3. Follow the latest trends
Regardless if you’re in the stock market, forex market, or you’re planning to try your luck in the world of cryptocurrency, you need to be constantly on alert for the latest news and trends. The greatest problem with this lies in the fact that different sources sometimes offer contradictory information. Therefore, it is paramount that you find someone you can trust. For instance, those who are oriented towards cryptocurrencies, especially towards ICO investments, might want to look for reliable information on portals like The Blockchain Review.
4. Margin and leverage
Depending on your broker, you might have a way of facilitating your growth. This especially goes in the forex market where you get the options of margin and leverage, which allow you to trade with figures that are much higher than you’re ready to invest. Sometimes, this will be something as low as 1:10 or 1:20, while in other cases the leverage goes as high as 1:500. This means that you get to invest 500 times the amount you’ve initially invested. Still, while your profits will skyrocket, so will your losses. This means that you might find yourself out of the game sooner than you’ve expected.
5. Diversify your portfolio
At the end of the day, there are times when you’ll do everything right only to find the entire market you’ve entered crashing. In this situation, there’s nothing you can do but try to protect yourself by diversifying your portfolio in time. For instance, the value of precious metals (gold and silver) acts opposite to the value of currencies and stocks. Therefore, by holding your assets in both of these industries, you stand to have at some of them protected at all times. For this reason alone, most investors suggest holding at least 10 to 20 percent of all your assets in gold.
With just these five online trading truths in mind, you will be much better equipped to face what lies ahead. If there is one thing you should learn from all that we’ve discussed above it’s that sometimes, it’s not just about winning. Sometimes, it’s all about living to fight another day and learning from your own mistakes. Those who manage to adopt this mindset and shape their strategy accordingly are set for success.
Guest article written by: Dan Radak is a marketing professional with eleven years of experience. He is currently working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies. He is also a coauthor on several technology websites and regular contributor to Technivorz.