Summary
It is preferable for beginner traders to start with simple trading strategies based on fundamental indicators and easy-to-understand methods.
Effective risk management includes setting stop-loss orders, defining profit targets, and diversifying your investment portfolio to reduce potential losses.
Successful trading requires combining technical and fundamental analysis, adjusting position sizes according to risks, and managing the psychological aspect using a trading journal and practicing discipline to develop skills.
1. Start trading with simple strategies
Start with simple strategies like following moving averages and support and resistance levels to understand price movement.
Avoid complexity or using advanced indicators before fully understanding the basics.
2. Risk management
2.1 Set stop-loss and take-profit
Set a stop-loss order and a take-profit order before opening a trade to minimize risks deliberately.
Commit to a risk percentage not exceeding 1-2% of your capital for each trade to ensure account sustainability.
2.2 Diversify the portfolio
Diversify your investments across different assets such as stocks, bonds, and commodities to reduce the negative impact of a single event.
Do not rely solely on one asset or market to avoid sharp price fluctuations that affect your capital.
3. Technical and fundamental analysis
3.1 Technical analysis
Use charts and indicators like moving averages and the Relative Strength Index (RSI) to identify trends.
Know that technical analysis is based on the assumption that current price movement reflects all available information.
3.2 Fundamental analysis
Monitor economic factors such as interest rates and inflation rates to understand their impact on asset prices.
Evaluate the intrinsic value of a company through its financial data such as revenues and profits to identify investment opportunities.
4. The psychological aspect of trading
Control your emotions and avoid making impulsive decisions when faced with large losses or gains.
Avoid the bias of overconfidence that leads you to overtrade and ignore risk management.
Reduce market noise and focus on your plan without getting swayed by others' analyses.
5. Position sizing
Determine the size of each trade based on a fixed risk percentage of your total capital.
Adopt equations to calculate the position size based on the distance to the stop-loss and the available capital to control accuracy.
6. Keeping a trading journal
Record all details of your trades: entry and exit points, size, notes, and accompanying emotions.
Review your record regularly to explore performance patterns and identify your strengths and weaknesses.
Use the results of reviews to adjust your strategies and improve your future decisions.
7. Continuous learning and practicing on a demo account
Test your strategies on a demo account before risking real capital to avoid costly mistakes.
Follow economic and financial news to stay informed about changes that may affect your markets.