Psychology of Trading Pt. 2
Trade smart by following a plan and not your emotions. Our Technical Analysts will provide you with a plan to follow, but it's up to you to keep your emotions in check. If you find yourself getting too emotional, reduce the amount you're trading until you gain confidence or use a demo account until you become profitable and confident.
Remember to never risk more than 1%-3% of your account and to always trade in the direction of the trend. If you don't learn anything else, learn this: trading against the trend is the quickest way to lose your money. Don't short or use leverage if you're not consistently making profitable trades. Leverage will only amplify your losses if you're not profitable in general.
Keep it simple and stay humble. Don't fall for the trap of thinking you're smarter than everyone else and can beat the market with complex methods. We've found that simple is best. React to the same support and resistance levels as everyone else, and avoid being greedy or overtrading.
Create a rule-based trading system and stick to it. Pre-evaluate and preplan, then follow through. By sticking to the plan, you can properly manage risk and predict results. Don't trade based on emotions or try to make huge gains before you become a profitable trader. Trade smart, use a simple rule-based system, manage risk properly, and always trade in the direction of the trend.