1. Learning the basics
Cultivating a learning habit goes a long way. Learning and re-learning are equally important both for novice and more experienced traders, especially when it comes to the basic terms. Just like with any other field, it is hard or pretty much impossible to succeed in trading without knowing and understanding the main principles. It is good practice to read and watch a lot of materials on trading. You may explore the IQ Option Blog: just use the search field to find articles on any topic that you are interested in. Learning basic trading terms is a good start.
2. Doing research
Knowing the main concepts is the basis that will allow a trader to move forward. Still, in order to trade an asset, it is not enough just to know the bare minimum. The market is always changing and it is necessary to understand why. After picking certain assets to trade, it is helpful to do research on them. Whether it’s a stock, a currency pair, or even crypto – there is always a possibility to dig deeper, learn about the past events that caused it to grow or fall and find out as much information about it as possible.
“The activity you’re most avoiding contains your biggest opportunity.” – Robin Sharma
3. Checking the news
Nothing is permanent and the market conditions can change in a blink of an eye when influential news is released. Reading the news and finding information relevant to your preferred assets is extremely important and it can be used to your advantage. A habit of skimming through the news in the morning might help traders understand the connection between the graph movement and real world events. Staying informed and being on top of the latest news is a valuable skill for traders and investors.
4. Using technical analysis
Technical analysis is a powerful tool that is widely used by traders. Even new traders learn about at least two or three popular indicators and start implementing them in their strategies. Of course, no indicator can guarantee absolute success, but they do help to analyze the market movement. Picking certain indicators and mastering them might help improve your strategy, so it is definitely worth looking into.
5. Sticking to a trading plan
Another important and, no doubt, very helpful habit is writing down a trading plan. Coming up with a plan that describes all the details of the strategy that a trader implements is useful for several reasons: it keeps the trader’s activity organized, controls the trader’s behaviour and doesn’t let emotions interfere. It could also be a good practice for impatient traders who tend to risk their capital more than they would like to. Keeping a trading journal is another way to look back on the previous deals and use this experience to improve one’s trading approach.
6. Managing risks
One may think that the most important thing in trading is making money, but it is actually the opposite – the most important thing is not losing money. Saving your capital and building it slowly, rather than risking it and losing funds is a skill and a habit that needs to be developed by a trader. There are many great risk management tools out there, from writing down a trading plan and using stop loss levels to the 2% rule. It is just a matter of choosing what works for you.
7. Communicating with other traders
Discussing the market with other traders and learning about others’ experiences can be beneficial both in terms of new knowledge and socializing. However, blindly following other people’s advice is not a good idea: it can lead to unsuccessful deals or even a scam in the worst-case scenario. Balance is key – listen to what others have to say and consider it, but always use your own knowledge and experience when making the final decision.