Reasons These 3 Trading Pillars Must Have
These 3 pillars are very important in trading because they will be closely related to the trading strategy that traders will use later. In addition, traders will find it easy to get large profits. What are the 3 pillars of trading in question? Check out the explanation below:
Method
A simple trading method or method means making all aspects of a trader's trading activity uncomplicated and easy to implement, from the interpretation of price movements to the way the trader executes a position. There are two methods of trading, namely technical analysis and fundamental analysis.
Technical analysis is an attempt to estimate prices by observing past price changes, trading volumes and the composite price index. Price changes tend to move in one particular direction (tend). Certain patterns in the past will repeat themselves in the future. Technical analysis is more concerned with what has happened in the market, rather than what should have happened. Meanwhile, fundamental analysis is an analytical method based on the fundamental economic factors of a company, including the company's financial and business performance. This technique focuses on financial ratios and events that directly or indirectly affect the company's financial performance.
Money Management
For money management, the risk percentage that the trader determines must be quite realistic and in accordance with the current balance conditions. Apart from that, traders can also add risk or reward records for each trade to the system checklist.
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