1. Understand market conditions and trends - I know its counter intuitive but if you understand what's going on in the market and where things fit in context then you are able to make good decisions when making trades. Market conditions change rapidly therefore you need to keep up with what's happening. If you don't have the time to do the research yourself then look at news platforms like CNBC, Bloomberg, etc. that provide real-time analysis and commentary on big moves in the market.
2. Trade with conviction and discipline - I'm sure you've been told before that emotions rule over rational decision making, especially in the markets. You should never trade emotionally or with any fear for loss of capital. I've seen many traders lose their shirts after a bad trade or losing money because they were afraid of losing it all. Don't let fear control your actions. Fear is irrational and only serves to inhibit performance, so eliminate it entirely from your mental processes. Discipline will take care of everything else!
3. Have realistic goals - When entering and exiting positions, set your expectations and objectives carefully. Do you want to make $10k per week? Or maybe just break even? What does a profitable trade mean to you? Set these goals so that you can measure your progress.
4. Use stop losses properly - Stop losses are a tool that are designed to limit potential losses. They are best used when you're long (going long) on an asset, however some people use them incorrectly and end up taking out way too much of their position. Be careful about how often you use stops, otherwise you may find yourself getting out of your favourite assets prematurely.
5. Know your risk tolerance - Many traders fall into the trap of chasing returns and not being prepared to accept a certain amount of risk. Risk tolerance is something that is best assessed before jumping into the deep end. If you're not comfortable with losing X number of dollars or percentage of your account value then don't go full tilt ahead! Also, try to figure out whether you're willing to take greater risks than others. If you think you'll always be able to hold tight until the bottom drops out, then you might be in for a rude awakening once the market takes off!
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