Every trading strategy has certain elements that need to be taken into consideration. Trading is never random and should not be done without a plan. In order to have a plan, traders need to consider the following elements:
Money management
This is all about how much you are willing to risk on each trade. The usual risk is 1-3% but some traders may choose to take more risk for the potential of greater returns. It comes down to your risk tolerance and your personality as a trader. You should not risk too much on each trade in order to maintain a chance of trading if you experience a bad losing streak.
Time frame and time management
This is divided into two parts, the first is determining the time frame that suits your personality and trading strategy, and the second is determining the amount of time you can devote to trading. No matter how short the time you may need to trade your strategy, you still need to allocate enough time to plan, execute, and study the results of your trades as well as adapt to future adjustments that can improve your profitability.
Start with a small investment$BTC
It is important to start trading on a demo account so that you can experience real market conditions without risking any real money. You can start trading with real money when you feel comfortable enough but it is essential that you start with money that you can afford to lose. Markets can be unpredictable and can lead to losses. Losing money should not affect your mental or financial health in such rare but possible scenarios.
Information
It is important to stay up to date with the latest economic events and market news and educate yourself daily, as this can impact your trading plan and expectations. There is a wealth of information available online including the CFI Education section which features short videos, articles, advanced technical concepts, a glossary of terms, and market news. You can also access daily market reports, free webinars, and advanced third-party analysis.
cohesion
Traders can easily be influenced by their emotions. Fear, greed, and other negative emotions can affect even the most skilled traders. Therefore, you should follow logic, common sense, and your trading plan in your trading instead of emotions. This can mean the difference between a successful trader and an unsuccessful one.
