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My name is Igor. I am a 45-year-old trader with years of experience navigating the financial markets. Over time, I’ve honed my strategies, learning from successes and setbacks. Today, I want to share four essential trading tips that have proven invaluable in my journey, helping me stay ahead in this ever-changing landscape.
Today is unique, and I’m thrilled to share some life-changing trading tips and strategies. These tips took me two decades to understand fully, significantly impacting my trading success. This article is perfect for you if you aim to become a profitable and consistent trader, especially if you’re already advanced. What’s most crucial here is that you’ll learn things I wish I had known 20 years ago, simple yet incredibly powerful. Let’s dive into it!
Trading Tip #1: Patience
When you hear “patience,” you might think, “Okay, I know traders need to be patient.” But trust me, it’s more complicated than that. Patience isn’t something that comes naturally on day one; it’s a skill you develop over time.
To illustrate, I was trading for a prop company just a few months ago. On one particular day, I made an average profit of $1,000, but my commissions were $600. Why? Because I wasn’t patient. A quote perfectly captures this: “The market is where impatient traders give money to patient traders.” This isn’t just another cliché; it’s a reality many traders overlook. Becoming a patient trader requires preparation.
Every trading day needs to be prepared meticulously. For example, today, I need to know all the economic news, understand the market structure, and analyze the trends over the past several days for the assets I trade. I must also be aware of whether the market is bullish or bearish and anticipate any significant news in the next week that could impact it. By being prepared, I can cultivate patience and make better trading decisions.
Trading Tip #2: Money Management
Money management is the most critical aspect of trading. Many traders underestimate it, thinking it’s just about managing risk—like limiting yourself to a 1% risk per trade. But money management is much more than that; it’s about building positions, entering trades, adjusting, stopping losses, collecting profits, and waiting for your targets.
Over my 20-year trading journey, I’ve learned the importance of being patient and strategic with money management. For instance, if you’re an intraday trader and your target level is 1.5, but the price is hovering around 1.499, you need to wait and see what happens. Sometimes, the price will miss your target by a pip and then reverse dramatically. In such cases, you must be ready to close your trade a few pips away from the original target to avoid missing out entirely.
Additionally, having a set dollar amount you’re willing to lose in a single trading session is crucial. This approach is common among stock traders in traditional prop firms, and it’s highly effective. Limiting your losses can protect your capital and live to trade another day.
Trading Tip #3: Diversify Your Strategies
You cannot rely on a single trading strategy; you need a portfolio of strategies. The market is constantly changing—bullish markets, bearish markets, choppy markets, news-driven markets—each requires a different approach.
For example, you’re trading EUR/USD and GBP/USD at the end of August 2024. You’ll notice a solid bullish trend, which isn’t straightforward. Experienced traders will recognize that there are different trends, each requiring a different strategy.
- Average Trend: This is a steady trend with minor, predictable pullbacks. You can quickly identify entry points by waiting for a pullback to a trend line on the Relative Strength Index (RSI) and entering the trade.
- Choppy Trend: This trend is erratic, with sharp spikes and drops. It’s challenging to trade on lower timeframes, so the best approach is to move up to a higher timeframe, such as the 4-hour or daily chart, to find a clear trend and enter your trades.
- Strong Bullish Trend: In this scenario, 95% of the candles are bullish. You can draw a trend line, watch the RSI, and wait for a pullback to the 50 level on the RSI before entering your trade.
Understanding these different market conditions and having a strategy for each will better equip you to navigate the markets successfully.
Trading Tip #4: Consider Economic News
In the past, I made the mistake of ignoring fundamentals and economic news. I believed that, as an intraday trader, I didn’t need to pay attention to them. I also made the mistake of trying to predict market reactions to news events, which often led to failure.
The best strategy is to wait for the news, observe how the market reacts, and then make your move. If the overall trend aligns with the news, you’ll have a much better chance of success. Don’t be greedy; wait for confirmation before entering a trade. This approach will significantly increase your profitability.
Conclusion
These four tips—patience, money management, diversified strategies, and awareness of economic news—are crucial to your success as a trader. I hope they provide you with valuable insights that will improve your trading. Please comment below if you have any questions or want more content like this. Happy trading, and have a great day!
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
