The trading world can be very intimidating for novice traders who are just starting their careers. There are many rules to learn, markets to watch, and specific strategies that need to be mastered. This can leave even the most passionate individual confused about where they should start to become successful.
For this reason, we created a list of 6 things every novice Hong Kong trader should know so you can get started on improving your money-making abilities in the financial industry.
1. Always Have an Exit Plan
One of the biggest mistakes new traders make is acting impulsively when closing out trades. With the adrenaline pumping through their bodies, novice traders will enter into risky or unprofitable trades, then will not have an exit strategy when things go sour.
This is the worst thing that you can do as a trader. Remember how much money you are willing to lose on each trade and never exceed this amount. When trading with overconfidence, your losses will outnumber your wins more times than they should. Make sure always to have an exit plan for every one of your trades!
2. Accept Rejection As Part Of The Process
Start by trading small and gradually increasing the size of your investments as you learn more about the market and become more comfortable taking risks with your capital. You need to be aware that it may take some time before you begin seeing profits. While this can feel frustrating, you just need to know that it is part of the process.
3. Use Trading Indicators For Support And Resistance
One of the most important concepts that a novice trader should learn is interpreting various trading indicators. Trading indicators can help you identify both support and resistance in your market; knowing where these points are located will allow you to make much more informed trading decisions in the future. If you want to become a better trader, you need to learn to use specific charting methods, such as Fibonacci retracements, to analyse different markets.
4. Learn To Watch And Read Markets When They Are Closed For The Day
Many novice traders focus on the major exchanges: the NYSE and NASDAQ for stocks and the CBOE and NQ for futures and options. While new traders must know how these markets operate, we suggest learning about other exchanges around the world so that you can be more successful.
Learning everything you can about the HKFE and SGX for commodities, forex options on the SESC, and futures contracts on the DCE will provide you with a good foundation of knowledge that can help you immensely in your professional career.
5. Watch How The “Pros” Trade Before Roulette Wheel Systems Start To Make Sense
Avoid all systems and strategies that involve roulette wheels or spinning objects; these are designed for small-time traders who do not know how to use proper money management techniques. Remember: if you cannot control yourself during times of success, no matter how complex or revolutionary, no system will ever work for you.
6. The Market Is Always Right, And You Won’t Win Every Time
No matter how much time and money you invest into your trading career, you will lose money at one point or another. It is inevitable. Losing builds part of a person’s character, and gaining strengthens that same character. By maintaining a positive attitude towards success and failure, you can turn every bad situation into a good one because that is what the market will reward you for.
Trading can be exciting and rewarding, but it can also be very stressful and confusing if the person involved does not know what they are doing. To become a successful day-trader, one must learn to make the market work for them. We recommend that you use a reputable online broker from Saxo Bank to help you get started with a demo account. For more details, check out the Saxo Bank website and start your trading journey today.