6 tips, that will increase your profit and decrease your losses as a trader

The way forward to becoming a profitable trader may be longer than most believe. Many new daytraders put 2,000-5,000 into their trading account, earn intensive for a few months, lose their money and never return.

If you like a new trader would like to avoid it or if you have a little experience and have survived this first phase, here are 6 tips for how to become a better daytrader:

1. Start small

If you've followed the media, you've definitely heard of daytraders who've earned millions of dollars on a single trade, or two-million million over one year. You may also have an idea that you would like to relocate your own income with daytrading relatively quickly, and maybe start living it in 2-3 months.

Forget all this.

If you want to become profitable in daytrading and live over it over time, be prepared to make it a long process. All experience shows that if you have gone to 0 or have passed through with a little minus after half a year, you should be very satisfied. You can not expect to make money at the beginning. The first half to full year is a period when you really learn something about the markets and where you make all the mistakes that many have done before you.

2. Have a strategy and stick to it

Many inexperienced daytraders deal a little with their feelings and intuition. Despite being relatively new to the market, they can have many opinions about where the market is going. If you are to succeed as a day trader, you need a much more controlled approach that follows one or more strategies that are firmly defined.

Psychologically, it can be hard to keep strictly strict for a particular set of rules, because one of the reasons why one wants to act is often the desire for more freedom and better opportunities for unfolding. Should you survive as a daytrader, you have to go against its intuition on this point and follow some set rules. It is not a case that the word discipline goes again in all rules of thumb from skilled daytraders. If you can not keep strictly on a strategy that you have laid, it may be that you should try something other than daytrading, because it's simply too dangerous to act a little hist and here from its intuition.

3. Have good control of stops and targets

The discipline "Money management" is highlighted by most professional daytraders as one of the most important tools for achieving good results, and first of all, avoiding the big losses. Both within daytrading and stock trading it is very common for traders and investors to let their losses run too long because they hope that the situation will be reversed. Conversely, one tend to often take their profits too fast to ensure their profits.

This kind of psychology should be reversed. If you analyze statistics on daytraders results, you will see that the most successful traders do not necessarily have a very high hit rate on their strategies - often it can be around 50 per cent, or even below 50 per cent. But their losses are much less than their winners because they understand to take the loss as soon as the market goes the opposite way to what they were expecting. And when they win, they have the courage to maintain the good deal much longer than others, and ensure that their profitable trades are 2-3 times bigger than their losses.

4. Set up rules for yourself. Write them down and follow them

Many skilled traders argue that you should have an almost mechanical attitude to their trades as soon as they are in them. It makes sense - and better results - to have defined precisely how to act in certain situations. We therefore recommend writing down a number of rules that should be followed. It can be both before and after entering into a trade.

5. Educate yourself

When you start shopping, it is important that you at the same time acquire as much knowledge as possible. With so much information on the web, it can sometimes be hard to find out where to start and what it's worth spending time on. Below are some suggestions for what you can read to get a better insight into how the markets work.

6. Analyze the market on several time horizons

As a trader, it is important to be aware of the slightly larger trends in the market. Even though you are trading on a 5-minute graph, it also makes sense to know the development of a daily graph and a medium graph such as a 1-hour graph. This gives you a better sense of where the market overall is heading, and you will also get a better overview of trends in the different time horizons.

One good advice is

Not tearing away the wild dung and taking impulse decisions based on one's own intuition about where the market is going. It is a strategy that will fail with almost 100 percent security