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First Golden Rule…

STUDY AND STRATEGISE YOUR MARKET

While investing in gold, always consider a mix of fundamental, technical, and sentimental analysis. Having a brief knowledge about the market, whether the markets are in ‘risk-on’ or ‘risk-off’ mode. Gold has traditionally been seen as a store of value, unlike a currency that can end up being almost worthless.

Research and studies have indicated that 95% of traders eventually lose money when they trade on financial markets, which is why investment professionals termed that money as “Dumb Money”.

We’ve been trading gold for quite a long time and have new windows always opening up to learn more about it. Always stick to the trade you make and be consistent over it for a long term profit. Spend more time alongside watching the market for trading opportunities, making sure you continue to learn more.

Second Golden Rule..

PLAN YOUR TRADE BEFORE YOU EXECUTE IT

Hasty decisions are often taken without thinking much about the consequences, especially in trading. Count on each trade you make because it helps in bringing out the picture of your successful trades in the long run trade you going to make. Market research and studies about the new trends and the upcoming trends will let you know more about the golden chances of winning. You should always have a few set of questions in mind before you perform any trade.

• What is the prevailing trend for each timescale?
• Where are the key support and resistance points?
• What is the plan for the trading day?
• What will be the cause to change the plan?
• What news/outside events could move the markets or cause “spikes” in the gold price?

Plan everything right from the beginning, from buying to selling, from where to place the stop losses, and most importantly where to exit the trade. Once the trade is planned and executed, everything must be disciplined – we made the trade for a good reason and with solid justification, therefore any changes or adjustments need equally solid justification.

Third Golden Rule..

MINIMISE THE LOSSES AND MAXIMIZE YOUR WINS

Always keep a close check on your profits as well as losses because it will help you out in preventing further market risks. If the trade is going totally against you, make sure you take an exit out of it quickly without any wastage of time. In many cases a trade will go the wrong way at some point – it’s not always possible to pick the perfect entry point and so you need to allow room for the trade to “breathe” as it confirms a bottom/ top or performs a natural retrace after a big move.

However, it is necessary to evaluate the market condition so that you can cut your losses and move on to the next trade. Conversely, when the trade is running the right way, don’t panic and take your profits at the first sign of a rally stalling. Sometimes this makes sense when the market is turning or if you’re initial pre-trade assessment wasn’t accurate – but generally, once a strong trending move has been identified and trade is correctly placed, the strategy should be to keep the trade open and trail your stop-loss position to lock in profits and ride the trend for as long as possible.

Fourth Golden Rule..

CONTROL YOUR EMOTIONS WHILE TRADING

Before making the decisions that keep losses small and maximizes winning traders you need ice in your veins. There is a tendency to become too emotionally involved with a trade once it has been placed and to want the trade to succeed too much.

New traders let their losses run for a longer time by either widening stops or ignoring signals that the trade is going wrong, in a desperate attempt not to lose money. Removing emotion from trading decisions is a very hard discipline to master, but it gets easier as you become successful.

Fifth Golden Rule..

MANGE YOUR MONEY AND TIME

Money management is vital to sustained success just like time. Many traders risk far too much of their available capital on each trade chasing the “big win” rather than a sustained, gradual and controlled growth through smaller more manageable trades. Always check on your time and money you invest in a single trade so that you are well aware of your place in the market.

Sixth Golden Rule..

DON’T TRY TO OVERCOME YOUR LOSSES IN A SHORTCUT

Inevitable losses, often lead an investor to jump straight back into the market in an attempt to put things right – it rarely works and, if it does, it’s usually more luck than judgment. Accept that losses are just as much a part of trading as winning. An investor should be able to deal with losses without allowing them to cloud their judgment which leads to confusion.

Seventh Golden Rule..

DON’T TRADE EXCESSIVELY

Whilst trading could (and should) be enjoyable, an investor should be aware that it is all too easy to get caught up in the excitement of “the gamble”. All too often we see punters placing numerous trades each day or multiple markets, placing far too many trades that haven’t been planned just to get the “buzz” from being in the game.

This blog was all about the Seven Golden Rules of becoming a successful trader. If you’d like more trading insights or would like to become successful at online trading, please sign-up.