After more than 5 years of Trader’s Bulletin, a few hundred blog posts under the bridge, and more years of trading than I’d care to add up … I’ve learned a few tricks along the way, and I’ve made plenty of mistakes …
Here are my top, totally free tips to anyone who’s venturing into the markets …
If you have any of your own, please add them at the bottom of this page.
1 • Don’t sweat over candlestick patterns – just learn these two …
You don’t need to memorize the hundreds of different candlestick patterns out there. As long as you can spot a doji, telling you that the market might be about to turn … and an engulfing, which is a great bullish or bearish confirmation … you’re covered.
If you don’t know any other candlesticks, these two will serve you well.
2 • A pullback can be your best friend
If you’re trading a breakout strategy, waiting for a pullback will increase your chances of a winner and can get you in at a better price.
So, the price breaks through our key level, but rather than jumping in, we’ll wait for it to retrace back to this level. Sure, it doesn’t always happen, but if we only take the trades where it does, we’ll be a lot safer …
This is a smart way to trade – the only reason more people don’t do it is because they rush into trades impatiently, afraid of missing opportunities. If you sit back and wait for the opportunity to come to you, can spend less time in the market, and have a higher success rate.
3 • ‘Bookkeeping’ doesn’t have to be a headache
A couple of minutes spent recording your trades is worth hours of pouring over charts, and will help keep you disciplined and on track. Without these kind of records, you can’t see what’s working and what isn’t.
If you’re not already using the Trader’s Bulletin spreadsheet journal, you can download your copy here.
4 • Check support & resistance levels.
If someone told you that you could access a chart that shows the key price levels that prices are likely to run to or turn at … you’d be mad not to look at it.
Yet, so many traders fail to note key support and resistance levels on their charts. These are HUGE glaring clues about what the price could do in the future – they are the closest you can get to a crystal ball about what the market will do!
All you need to do is check for major support and resistance levels – quickly note them down on your chart, and you’ll automatically be making better decisions in your trades.
5 • Don’t rely on just one broker
It’s easy to get ‘comfortable’ with a broker, but check the costs you’re paying. If another broker is offering the same market, but their spread is 1 point less – try using them instead.
If you’re trading with a 20 point profit target, and are paying out 1 point more than you have to – that’s giving up 5% of your profits. Can you afford to do that?
Shop around for the best deals. Most modern platforms are very simple and intuitive to use – there are all incredibly similar, so it should take long to get the hang of using a different one. I have a range of accounts …Core Spreads … Capital Spreads … ETX … IG … that I’ll happily flip between, according to what’s best for a particular strategy I’m following.
6 • No indicator is infallible
Don’t waste time searching for the ‘perfect’ trading indicator – it doesn’t exist.
All indicators will let you down some of the time, which is why monitoring results and looking to make subtle adjustments on your trade parameters is how you make an indicator work for you.
7 • Don’t ignore round numbers
Interesting things happen to prices around round numbers. If you ignore this, it could cost you money. If you take advantage of it – it can make you money! If you’d like to find out how, check out these posts LINK.
8 • Compounding is the most powerful money-making tool you can use
You can’t make serious money from the markets without tapping into this nuclear-powered trading tool.
There are different ways to compound. If you compound after every trade, it will have the most powerful effect. However, it’s perfectly valid to compound on an annual basis – or you can keep some of your profits aside to tap into if you have a losing run.
9 • Be patient
The very best advice I can give to any trader is to be realistic about what you can achieve.
It would be great if we discovered a trading method than never lost – or one that could double our money every month. But real wealth is built by plug, plug, plugging away at the markets, managing our risks, being sensible with our stakes, and compounding our winnings.
Take a look at the kind of returns the best hedge fund managers are achieving (say 30% per year) …
Sure, that may not pay off the mortgage in time for Christmas, but keep working on it, and it could do in the space of a few years.
So much of trading success comes down to taking it slowly – don’t rush into trades. Instead, by waiting for them to come to you, you’ll have a higher success rate, you’ll take less risks with your money … and you’ll have a much longer and more profitable trading career.
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