3 Main Things Beginner Traders Need to Master
Trading is one of the most popular jobs nowadays. This is because trading promises big profits for traders. However, besides that trading also has a very large risk. If a trader does not have knowledge and decides to enter the world of trading, he will experience a very large loss or loss. Therefore, before plunging into the world of trading, traders must master 3 main things, especially for novice traders. Here are 3 things that novice traders need to master:
psychology
Psychology is the first point in trading success. This is because psychology is very influential for the trade that is being carried out. Trading psychology is a broad term that encompasses all the emotions and feelings a typical trader will encounter while in the market. Some of these emotions are actually useful and may be for a trader to embrace, but others such as fear, greed, nervousness and anxiety should be avoided. Trading psychology is complex and takes time to fully master. In fact, many traders experience the negative effects of trading psychology more than the positive aspects. This statement can be seen in the premature closing of a losing trade, for example, due to the emergence of a fear of too big a loss, or simply doubling a losing position when the fear of realizing a loss turns into greed.
Money Management
The success factor in Forex Trading is not only a matter of technical strategy. However, it takes good Financial Management (Money Management) too. It takes a lot of patience to be successful in the forex field, in addition to proper knowledge, being able to quickly adapt to market situations, and a number of other qualities. Likewise, to be successful in forex trading, traders need a complete and mature trading plan. A complete plan should consist of when to enter, when to exit, which currency to choose, as well as managing finances while trading. The problem is, many traders are a little indifferent to financial management, even though this is very crucial to help success or failure during a career in the forex field. Money management is the management of funds or capital in a trading account. Before making trading transactions, it is highly recommended to first calculate how much volume or lots we will use for transactions. It is recommended that traders use lots of no more than 10% of the capital. This will make our margins healthier and safer for trading.
Technical and Fundamental Analysis
Technicals and Fundamentals are how traders read and
analyze the market. Technical is an attempt to predict the direction of price
movements and charts. While the fundamental is the analysis of a company's
financial performance. Between the two methods, technical remains an important
point because it provides information. This is the main difference between
technical and fundamental. There are several differences between these two
analyzes, namely technical analysis monitors price movements, while fundamental
analysis monitors factors outside of the price itself which are considered to
be able to influence its movement. Fundamental analysis is a long term approach
because this analysis is for investment purposes, while technical analysis is
used in the short term for trading purposes. Another difference can also be
seen from the time frame used, namely fundamental analysis using monthly and
even annual time frames, while technical analysis uses all time frames ranging
from minutes to weekly and monthly.
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