When it comes to trading, 90% of your success will come from just understanding the fundamentals, instilling them in your memory, and repeating them until they are fully integrated into your skill set.
In this essay, I’ll offer some of the finest advice I’ve received over the years that will pay off handsomely for you.
1. Set up tradingview email to SMS alerts
One of the number one tools I use is SMS alerts, it’s instant and I never miss the alerts when they come through, this allows me to get nice entries and exits. 160.com.au wrote a handy article about how to use tradingview email to SMS which you can read here.
2. What exactly is technical analysis, and how does it function?
Technical analysis is a scientific field that evaluates statistical data to examine investments (usually price and volume ). This strategy works because of fractal nature, which refers to the capacity of the same pricing patterns to arise independently across numerous time frames. This holds true for patterns seen in oscillators, indices, and other technical indicators.
3. What are the most successful trading systems?
Trend-following trading methods are the most successful. The goal of such trading systems is to recognise a trend and then “ride it” – that is, to invest early in the trend and take gains afterwards.
4. Which period of time is the most dependable?
Larger time spans are often more trustworthy than smaller time frames. When employing a larger time period, however, patterns and trade signals frequently take longer to form. 1 hour, 4 hours, daily, and weekly are the most popular time ranges.
5. What exactly is leverage? Is it a good technique to generate money quickly?
Borrowing money to fund an investment is referred to as leverage. When a trader utilises leverage with a ratio of 1:10 and the underlying asset moves by 1%, the leveraged asset moves by 10% in the same direction. Leverage is unquestionably one of the fastest methods to make money. It is, however, a rapid way to lose money.
6. When I’m a beginner (inexperienced) investor, should I employ leverage?
New investors frequently use leverage because it offers an appealing possibility to gain money quickly. An inexperienced investor, on the other hand, should not utilise leverage at all, in our opinion. This is due to the fact that leverage is extremely difficult to control, and its usage by an inexperienced trader almost always ends in financial loss.
7. Is it feasible to predict market peaks and bottoms to the second?
Even for a seasoned trader, predicting exact market tops and bottoms is extremely difficult. A technical analyst has a number of technical tools at his or her disposal for identifying market reversal points. However, in order to generate a profit in trading, it is not required to choose these specific areas. As previously stated, the greatest effective trading methods are trend-following. These trading strategies function by spotting and exploiting trends (without requirement to identify exact market top or bottom).
8. What is the definition of diversification? Why should I put it into practise?
Diversification is one of the risk management strategies that may be used in a portfolio. It simply means spreading wealth among a number of various ventures rather than concentrating it in a single one. Diversification protects an investor’s cash against price swings in certain market sectors. It is also necessary for the development of a long-term portfolio.
9. Should I invest in the stock market now that it has just hit a new high?
Most likely not. When the market achieves a new all-time high, it usually pulls back. As a result, we believe it is not a good idea to add to a long position merely because an asset has achieved a new all-time high. In a strong bull market, one of the finest techniques is to add to a long position when the price falls and then sell when the asset achieves a new all-time high.
10. Should I invest in an asset that has lately lost 90% of its value?
Certainly not. A drop of this size does not always imply a reversal of the price trend. There might be a variety of reasons why an asset’s value has dropped so dramatically; as a result, completing your own due research before initiating any deal is strongly recommended.
Is an asset’s previous performance indicative of its future performance?
No, the performance of an asset in the past should not be used to forecast its future performance.
11. As a beginning trader, should I utilise options or other derivatives?
As a rookie trader, there are no restrictions on using options, but derivatives are more complicated products than stocks or bonds, and their pricing is decided by a number of factors that an investor should be aware of. If a trader does not completely comprehend how a certain asset class acts, that asset class should be avoided.
12. Should I keep a losing position open?
It depends on the investor’s assumptions, but in general, it is best to exit failing positions to avoid future losses and to free up funds to invest elsewhere.
13. I don’t believe I’ve made many exchanges recently. So, what should I do now?
Making enough deals isn’t the goal of trading; it’s about making money. There aren’t always enough chances in the market, and doing too many trades might lead to a trader taking positions he or she isn’t completely comfortable with. Furthermore, too many transactions lower earnings owing to the accumulation of trading expenses. If a trader is unable to identify another trading opportunity, the ideal answer is to take a “pause” and continue seeking for the next chance rather than forcing oneself or herself to trade.
DISCLAIMER: This study is not meant to promote the purchase or sale of any specific asset. Furthermore, it should not be used as a foundation for individual investors to make trade decisions. Before engaging in commerce, you should conduct your own due diligence. This material is purely for educational purposes.