Today, together with the team from BIT we want to share useful tips for novice traders. The BIT platform has been operating since 2020 and has shown its best side in the market.
Being a trader is highly paid and honorable today. This deserves special attention. Novice traders try to conduct their activities on the stock exchanges correctly, but there is assumed serious financial risk. If we talk about advice to a novice trader, then experts repeat about minimizing financial risks in the first place, and then conducting activities without violating laws.
What should traders pay special attention to today?
9 tips for novice traders
1. It takes time to be successful in trading
The path to success in trading currencies and cryptocurrencies can be a long one. Trading is a career, not a get-rich-quick scheme. You should understand that it may take you from one to three years to become a successful trader, and sometimes more. If you are not ready to learn trading, you should not even start trading for at least one year.
2. Take the first step
If you have already learned the basics of trading and are successfully trading on demo, then it’s time to open a real account. The question arises: how much should you top it up with? Many experts say that the amount should be quite large, while others reject this fact.
But in any case, if you top up your first real account with a significant amount of money, you doom yourself to failure. Why?
Unlike beginners, professional traders are able to control their emotions. The more time you trade, the better you will be able to control yourself. Trading psychology is not easy to master, and at first your emotions will greatly hinder you.
One of the most destructive emotions you will encounter is fear. The fear of losses will force you to constantly commit various stupidities in your trading. So, if you trade with a large enough deposit, you will be constantly afraid of losing money. Imagine that for one unsuccessful trade you can lose only $ 1. It seems to be normal. And if your risk on the transaction would be $ 1,000?
For this reason, it is better to start trading with a small capital. You must constantly learn to cope with negative emotions and strengthen your trading psychology. Over time, you will be able to gradually replenish your account with new money. If you start with a small amount, it will give you the opportunity and time to work on your trading psychology.
We suggest starting trading with BIT platform. With BIT’s User-friendly and simple interface — you will quickly be able to understand how the platform works. BIT has been operating since 2020 and has proven itself as a safe platform.
3. Feel confident when trading
Many beginners open a deal only because of one desire – just to trade. Don’t do that. They make deals only because of the thought of being constantly on the market. Instead of waiting for a good trading signal, they open a lot of positions, most of which bring only losses.
This method is dangerous and it may cost you a deposit. Therefore, before making a deal, ask yourself the following two questions:
- The reason I’m opening this deal?
- Am I acting according to my trading strategy at the moment?
Never open a deal if you are not completely sure about it.
4. Be able to change in response to new circumstances
Be more flexible, as it is very important for a trader to be able to adapt to frequently changing market conditions.
Most likely, you have a trading strategy — this is good, but you do not need to follow it steadily in everything. We are aware of the volatility of the financial market, so you need to remain as agile and flexible in order to successfully trade on it. In case of emergency and unexpected situations, be able to analyze the current situation and quickly make the necessary decisions.
5. Use support and resistance levels
All novice traders are aware of the levels, but only a small part of them use it properly. Agree that all traders are required to place support and resistance levels on their chart. And this is regardless of the type of trading strategy or system, even if you use robots, support and resistance levels are vital.
Support and resistance levels indicate exactly where the price is likely to turn around or continue its movement. Traders are always looking to get an idea of what the price will do in the future. Support and resistance levels give us this understanding.
No matter what trading strategy you use, support and resistance levels will give you an understanding of the current market situation. Therefore, always place the levels on the chart.
6. Set goals
The desire for excessive trading is a common problem among novice traders.
If you set clear profit goals for yourself, you can relax and leave trading until the end of next week, when you reach them. This will help you to relieve psychological stress. When you have a clear plan, it will be easier for you to stay disciplined.
7. Keep a trade journal
Keeping a trading journal helps you track your mistakes in trading and learn from unsuccessful actions. In addition, with the help of a trading journal, you will be able to see the shortcomings of your trading strategy.
Analyze which patterns and entry points were the most unsuccessful for you, and exclude them from your trading.
8. Plan your trading week
Planning a trading week will be extremely useful for your trading results, but unfortunately, many traders do not do this.
You can analyze the upcoming week on the weekend to be ready to trade when the market opens again. It will take you no more than 30-40 minutes.
You can record the time of the release of important news that should take place next week. This will save you from entering the market at the wrong time. You can also view each currency pair and analyze the price behavior. Pay attention to weekly timeframes. And also check the completed levels.
These simple steps will prepare you for the upcoming trading week and help you avoid mistakes in trading.
9. Trade on the daily timeframe
The daily timeframe is the best for trading.
It’s okay if you disagree with this statement. Everyone should find a suitable time frame for themselves, which can vary from daily to 1-minute. However, for many, the transition to a daily time frame had the greatest positive impact on trading results. Nothing else is even close to comparable in efficiency.
Dedicate a month to trading daily charts and see what happens to your results.
Do not rush to trade.
The market will exist for a very long time. At the same time, it is best to start with a demo account in order to have time to understand the main features of the market. Trading should not be carried out under the influence of boredom or impulse. It is advisable to plan and think carefully about everything.
One should beware of early success.
At the beginning of the activity, there are unlikely to be only successful transactions. If luck smiles, it should not be assumed that everything will work out flawlessly in the future.
It is important to think and work.
One should strive to acquire knowledge and skills in order to engage in exchange trading independently. The journey will be long, and you should prepare for it in advance.
It is best to engage in trading ideas and strategies, research and test them.
It directly depends on how high the chances of the desired success will be.
It is recommended to keep a transaction log.
It will help to thoroughly study and analyze the results. If you have patience and focus on work, you will be able to succeed over time.
It is advisable to allocate sufficient capital for stock trading.
Without it, the risks of burning out in the market and going into negative territory, and then not correcting the situation, will be too high.
It is important to understand that trading on the stock exchange will not be too profitable initially and much depends on knowledge and skills. It is necessary to understand how to act in the future in order to achieve the desired success over time.
Start trading with BIT. The BIT crypto exchange offers spot trading of cryptocurrencies with leverage, and also gives the opportunity to make transactions with futures contracts and options. The exchange works with retail and professional traders, miners, primary brokers and hedge funds.