Three Steps to Improving Your Trading

For new beginner traders wanting to improve their trading education will play a fundamental role to improve their understanding of the trading market and this will lead to the trader becoming more successful.

After traders have learned the trading lessons required to begin trading & well as the various strategies then traders need to follow these three steps below so as to improve their trading. If you have not learnt about the trading lessons needed to start trading or you are looking for a trading course that provides these trading lessons then you can find these trading lessons on the learn trading section of this website. You also can find strategies from the learn strategies section of this site. After you have completed reading these guides traders can then follow these steps to improve their trading.

Come Up with a Plan

Traders need to plan their trading and to do this, traders will have to create a trading plan. Traders looking for an example trading plan can find one on this website, the guide of writing a trading plan can be found on the learn tutorials of this websiteesite, this is the last tutorial on this learn tutorials section.

Use a Plan & Stick to the Indices Plan

Traders should always use the trading plan they come up with to trade the online stock market. The strategy that a trader chooses should be well written in this trading plan and trader should always follow the rules of this trading plan when deciding when to open and close trades.

The instruments that a trader will be trading will also be specified within this trading plan, the trading instruments chosen will be the charts that are best suited for trading based on the trader's strategy.

The trading plan will also specify which chart timeframe that the trader will be trading with, whether the trader will use the minute charts or hourly charts. The time-frames used will depend on the trading style of a stock index trader. A scalper will use the one minute charts, a day trader may use the 15 minute charts and the swing trader may use hourly charts.

The trading plan will also set the takeprofit targets for each trade as well as the stop loss order for each trade position. Once a trade is open then a stock indices trader will close their trade position once the take profit order level is reached or once the stop loss level is reached. By sticking to this method of closing trades at pre decided levels will ensure that traders will be more successful because they will have decided the points to close trades before opening the trade.

The trading plan will also include indices money management rules that the trader will follow. For example a stock index trader should follow the trading money management rule that specifies that they should not risk more than 2% of their account equity on any one single trade. The trading money management rules tutorial can also be found on this site on the learn tutorial section under the trading key concepts tutorials.

If as a trader your chosen strategy is to use automated strategies and Expert Advisors then these automated trade strategy should be specified in your plan. Whatever system you as a trader decide to trade with as a trader, write it in your plan & stick to trading with that strategy.

Traders should also avoid emotions of fear and greed when trading in trading market. The trading plan will help traders plan their trades & this way traders will not make trades based on their emotions. A stock indices plan will help a trader set clear goals when trading & at same time will help traders to stay organized when trading and thus ensuring traders become more successful when trading in the market.

Trade with The Trend

Traders should always make sure that they open trade positions in direction of the trend. The market trend is the general direction of the market trading prices and this direction can be upwards or downwards. Once the trading market trends start to move in a particular direction price will continue to move in that direction for a while because the trends will have gained momentum that will keep pushing trading prices in direction of the market trend.

This is why traders should always open trades in direction of the market trend so as to trade in the direction that has momentum & this way traders can increase their chances of being successful when trading the market.

Trader always have a saying in the trading market - The trend is your friend - which means that traders should always trade in direction of the trend and never open a trade against the trading market trend. This is because the most reliable method of trading indices, and not just indices trading even stocks and other financial instruments is to follow the trend & only open trades in direction of the trend.

The different techniques of determining the direction of a market trend & to do this trader should use trendlines or moving averages or Bollinger bands indicator.

Keep a Journal To Track Your Results

Traders should always keep a trading journal & write down all trades that they open in this journal, they should writedown why they opened each trade, when they closed the trade & also the amount of profit or loss generated from that trade position.

After a while traders can then review the trades they have made try and look at why the losing trades made a loss & why the winning trades were successful and after that they can then try & do more of what makes them successful and less of what is making them to open losing trades & that way keep on improving on their strategy.

As a trader if you don't maintain a trading journal you might continue making the same trading mistakes over & over again without knowing, but if you keep a trading journal and keep reviewing this journal from time to time then you give yourself a chance to identify the mistakes you make in trading by reviewing your journal.

Once a trader gains some experience in the trading market and start to recognizes the successful trading patterns from their winning stock trades they can then use this information to identify the trading setups that will have more probability of producing winning trades & this way they can then continue to improve their trading.

Study More Topics:

Trade Stock Indices

Three Steps to Improving Your Trading

Come Up with a Plan

Trade with The Trend

Keep a Journal To Track Your Results