Not just anyone can be a successful trader. To become a profitable stock trader, there are many things you need to do that some people simply do not know about. There are many great platforms out there to help, TopStepTrader being one. There are also platforms available such as Benzinga Pro that is a live stock trading news feed.
If you’re new to trading, you most likely just want to skip everything and get right to the part where you become a profitable trader. However, there are many things you must first need to know about that. In this article, we will outline 3 rules for successful trading. With a platform, perhaps like SpeedTrader by your side and these 3 rules, there is nothing stopping you from becoming successful.
Each of these rules are incredibly important and listening to them is highly advised. They work well and the results are strong. Keeping them in mind can greatly increase your odds of succeeding. Here are the three rules for successful trading.
1) Treat it like a business, not a hobby
If you want to be a successful trader, you must treat trading like a business and not at all as a hobby. Not a hobby, job, or venture, it must be treated just like you would a full or part-time business. If it is approached much like a hobby, there will never be any real commitment to learning.
On top of that, if it is treated like a job, it will likely be frustrating because there isn’t a normal paycheck like the one you would receive from a job. Trading is much like a business because it incurs losses, taxes, stress, expenses, risk, and uncertainty. With trading, you are essentially a small business owner. This means that you must research and strategize to maximize your business potential.
2) Risk only what you can afford
It is important that before you start to use real cash, you make sure that all of the money in the trading account really is expendable. If it is not the trader should really keep saving until it becomes that way. Money in a trading account should never be allocated for the kids college tuition or for your mortgage.
It is a bad idea for traders to ever think they are simply borrowing money from these important obligations. Losing money can be extremely traumatic. That means that it is even more so if it is capital that should never have even been risked in the first place.
3) Always know when to stop
All good things must come to an end, especially if they are causing you financial troubles. Two reasons to stop trading are an ineffective trading plan and an ineffective trader. Make sure that you stay unemotional and business-like throughout the whole thing, even when it comes time to reevaluate.
It doesn’t always have to mean an end either. After the difficulties or challenges have been dealt with, the trader can easily return to business.