Do you have a trading strategy? A trading strategy is essentially a road map that traders follow when trading in their respective markets. It provides the trader with a set of rules that don’t change apart from responding to market action. Traders that religiously follow their trading strategies are far less prone to being swayed by emotion and other circumstances that can potentially derail their trading activities.
A trading strategy sets down exactly when you have to buy and sell, irrespective of what else may be happing in the market at the time, or what you may be ‘feeling’ at the time. Successful traders will invariably tell you that the key to their success is developing a reliable and effective trading strategy that they don’t deviate from.
When developing your own successful trading strategy, take a look at what successful traders in your market are doing. Don’t reinvent the wheel but rather take a leaf out of their book. Do what others are already proving works instead of trying to develop your own unique strategy.
Regardless of what type of strategy you use, one of the most important things is ensuring that you understand it. You must clearly know what the entry and exit signals are. Don’t be tempted to take unproven or untested ‘advice’ from apparent experts. Trading forums and chat groups are full of ‘would be’ experts proffering free advice but in most cases it’s nothing more than opinion. Opinions though don’t amount to very much in the world of trading. Stick to the tried and true; find yourself a trading strategy that is proven to work and will work in any market, in any conditions.
Due the requirement for having strong and proven trading strategies in place, more traders today are searching for success with trading by utilizing technology, notably programs like smart trading algorithms and RSI (relative strength index) indicators. These types of programs set down the buy and sell parameters pretty clearly, or can make the trades for you when these predetermined market conditions are met. Sticking to these parameters removes the uncertainties and dithering that may cost you a profitable trade and a significant amount of money.
In other words, what successful trading boils down to is having a clearly defined and easy to understand set of rules, and a trading strategy that controls your indicators and signals effectively. However, even the most successful strategies are doomed to fail if you don’t stick to them! If you let yourself get caught up in the whirlwind atmosphere that is trading, and lose your cool, you’ll start making decisions based on the emotions of the moment rather than cool rational logic underpinned by a proven trading strategy. And that is where you’ll come unstuck!
Don’t think you can manage to stick to a trading strategy? Perhaps an automated trading like the one in the David Koch bitcoin revolution review would be more suitable for you. These types of platforms are programmed to buy and sell automatically when certain pre-determined market conditions are met. They also ‘learn’ the more trades they make. That makes them particularly useful for beginner traders, or traders who know they can’t keep their cool when the markets heat up.