Successful traders need to know what they are doing, i.e., they must think and act appropriately. Trading is a mentally tiring activity. It is a non-stop battle between your wits and a rapidly changing financial and business environment. Beware of focusing on making money more than the actual business itself. However, don’t despair, trading does not have to be an awful and painful activity.
As a trader, managing your business properly, effectively, and successfully is your number one priority. You need to follow certain procedures and learn how to make decisions on the go if you want to earn a decent income. Your strategy needs to be creative, but at the same time you have to make sure that the money you use is relatively secure.
In the world of finance, a trader is a person or firm that purchases and sells financial instruments such as derivatives, mutual funds, commodities, bonds, and stocks. Traders may work as agents, speculators, arbitrageurs, or hedgers. Today, there are several different kinds of traders.
Traders tend to work long hours; usually from 7am to about 6.30pm. Novices, however, may have to work longer. The Forex market is open from 6.30am to 5pm. Some commodity markets are open until much later.
Time must be well spent
Good traders must be constantly aware of the potential benefits and risks of their actions and strategies. Stop-loss and take-profit represents two major elements in trade management. It is equally as important as the trade analysis traders would do prior to opening a position. The most important thing to care for is the right kind of management of the stop-loss and take-profit.
SL stands for Stop-Loss, it is when we instruct our brokers to limit losses in a trade or open position. TP stands for Target Price or Take Profit, it is when we instruct our brokers to close our trade or position when the price hits a certain profit level.
Without sorting things out properly, traders are less likely to find the right way to execute a trade successfully.
Be calm at any market conditions
Do you know why smart traders in Hong Kong today make so much money CFD trading? The simple answer is a stable mindset. They never become frustrated with the results of their trade. In fact, they don’t trade in the market with any trace of aggression.
Becoming a profitable trader is a very challenging task. You have to gain complete control over your emotions and operate in the marketplace with cold, analytical logic. Most importantly, you must remain cool no matter what the conditions in the market are like.
Care must be taken
A professional and careful trader needs to define the right kind of settings first. All of the most successful trades required a good setting initially. Take your time when you are managing money and want to do so effectively and profitably.
Like in any business, it is necessary to be in control of the finances, i.e., money.
By being aware of the safest approaches to trades, there will be some good executions. The term ‘execution’ refers to the purchase or sale of a financial instrument. When an order gets filled it is executed. When we submit a trade, we send it to a broker. The broker subsequently finds the best way to execute it.
Safety is the main concept
The decisions we have to make as traders are vital for our success. We need to know exactly when to enter and exit, and how much money we are prepared to risk. We should have a plan that includes money management and positions.
Successful traders need to have the right balance of imagination, daring, and caution. You cannot be too much of a risk lover, but you cannot be risk-averse either. If somebody is risk-averse, it means that they do not like taking any kind of risk.
Video – What does a Trader do?
This video, by Market Business News, explains what a trader does using simple English and examples.