Skip to content Skip to footer

4 Vital Steps to Profitability

The evolution of the World Wide Web has revolutionized every aspect of our lives. Cheque books have transformed into mobile banking apps, photo albums have become portable and television subscriptions have transformed to Netflix and Amazon Prime accounts (bless those that pay so their family and friends can use them for free). The way in which trading operates has also seen a drastic change. Gone are the days that trading the markets were only for the privileged few who had been passed the knowledge and understood the traders ‘language’. Nonetheless, does that then mean trading is suitable for everyone? Just because you can does it mean you should?

“Trading is a Discipline”

First and foremost trading is a discipline. Your emotions and adrenaline must remain under control at all times. It must not be converted into an expensive hobby and a conversation starter to entertain and impress guests or friends.

So let us focus on the priorities. Thankfully, unlike any other relationship in the world, your relationship with the markets has only one objective: profitability.

  1. Education

Before you travel any further along your journey into the unknown depths of the market, you must ask yourself, “Can I justify every trade I’ve made with a rational explanation?” Trading the market on your ‘gut’ may be a popular statement for many world-renowned successful traders. However, do not be under the impression that they simply trade on a whim. Their ‘guts’ are highly tuned and well-educated machines that have been developed over many years through experience. Trading is a business. In order for any business to obtain true success, it must be well versed in its marketplace, continuously growing and learning. Would you decide to become a chef tomorrow just because your local restaurant owner appears to be successful? No!

  1. Strategy

In order to cancel out the considerable noise of the market, you must define yourself within it. Will you be trading equities, options, futures, forex, or precious metals? Are you a maverick that operates across multiple instruments? Once you have narrowed this vast array of options to match your current capabilities it is time to build a strategy. Research is imperative however ultimately your strategy will always be unique. The rules within your strategy must be considered to be your “10 Commandments”. Here is an example of a few of my own;

  • Thou shalt never have a stop loss of more than 30 Pips
  • Thou shalt never set a financial target for the day
  • Thou shalt not become emotionally unstable during trading hours
  1. Risk Management

Is it profit that is the light at the end of your tunnel? If so, the vehicle that will ensure you arrive at your destination is managing risk. The exact moment you break the rules of your strategy with no remorse, regardless of the outcome, you have set a dangerous precedent. Do strategies need developing and editing? Of course! However, managing risk is an integral part of every trader’s life, whether that is on Wall Street or in the spare room which you have converted into your private office. Do not underestimate its importance. Your strategy must never allow recklessness! You have been warned.

  1. Keep a Trading Diary

Evaluation of your decisions is an integral part of your progression as a trader. It is essential for a corporation or small business to track its expenses, turnover, and profit. Without this, they can never understand their performance and develop their profits. Trading requires the same approach. A trading diary should contain all trades, their outcomes, and your overall performance for the periodic timescales you are using. This, combined with an evaluation of the market’s current state, will allow you to adjust your strategy, manage your risk, and ultimately take you back to your key objective: profitability.

At Tradeview we understand the complexity of our clients’ requirements. This is why we are consistently developing our platforms and providing additional services to clients as well as prospective clients and those within the industry. The ‘Trading Room’ section on our website offers a wide range of educational articles, videos, a pivot calculator, and many other technical trading tools.

 

Rosario Bue

Senior Market Analyst
rbue@tvmarkets.com

Show CommentsClose Comments

Leave a comment

0.0/5

Tradeview Ltd. is not a portfolio manager or an investment advisor. This Market Report is for informational purposes only. Any statements made or opinions voiced in this Market Report do not constitute investment advice. The Tradeview Ltd. Market Report does not constitute a solicitation to buy or sell in the financial markets. Although the information contained in the Market Report comes from trusted sources, Tradeview Ltd. is not responsible for guaranteeing the accuracy, timeliness, completeness, or fitness of such sources. Tradeview Ltd. shall not be responsible for and disclaims all liability for any losses which may be suffered from access and use of the contents of the Tradeview Ltd. Market Report. Trading any financial instrument on margin, using leverage or otherwise involves considerable risk. Therefore, before deciding to participate in any style of trading, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. Consulting with your investment counselor, attorney, accountant or other professional upon whom you rely for guidance as to the appropriateness of an investment in any style of trading is recommended.

Tradeview Ltd.

Is licensed to carry on securities investment business and is regulated by the Cayman Islands Monetary Authority (CIMA) as a full securities broker-dealer. Tradeview conducts business pursuant to the Cayman Islands Securities Investment Business Law (SIBL) and its activities fall under the direct supervision of the Investments and Securities Division of CIMA.
Headquarters: 5th Floor Anderson Square, 64 Shedden Road, Georgetown, Grand Cayman, Cayman Islands KY1-1002, BWI.
Website: www.tradeviewforex.com

Tradeview Asia Ltd.

Is licensed and regulated by the Labuan Financial Services Authority (FSA) as a Money Broker, registration number LL15870 licensed to facilitate transactions in foreign exchange pursuant to Labuan Financial Services and Securities Act 2010, the Labuan Companies Act 1990 and the Labuan Business Activity Tax Act 1990.
Headquarters: International Business Financial Centre at Office 5, Jamie Business Center I, Unit F10, First Floor, Paragon Labuan, Jalan Mustapha, 87000 Labuan F.T.
Website: www.tvmgloballtd.com

Tradeview Europe Ltd.

Is licensed as a Category 2 Investment Service Company and is regulated by the Malta Financial Services Authority (MFSA). The Malta Financial Services Authority (MFSA) is the single regulator for financial services in Malta. MFSA is a fully autonomous public institution and reports to Parliament on an annual basis. The MFSA is a member of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the International Organization of Securities Commissions (IOSCO) and is a signatory of the Multilateral Memorandum of Understanding with other European regulatory Institutions. Tradeview is authorized to provide financial services across multiple asset classes and is passported in the EU/EEA under MiFID II (EU Markets in Financial Instruments Directive).
Headquarters: 157 Archbishops Street, Valletta VLT Malta 1440.
Website: www.tradeview.eu

Tradeview Financial Markets S.A.C Global

Is authorized to conduct business pursuant to and in compliance with the General Law of Companies (LGS) promulgated by the government of Peru. Tradeview Financial Markets S.A.C is registered with the National Superintendence of Public Registries (SUNARP), company number 13089531. Tradeview Financial Markets S.A.C provides financial services in selected OTC derivative markets in compliance with all applicable government regulations.
Headquarters: Los Mirtos 239 Urb. San Eugenio, Lince, Lima, Perú.
Website: www.tradeviewlatam.com