If you trade online, you should heed this advice
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Dany Mawas, Regional Director of Infinox Capital, says developing a trading mindset is important for traders looking to ensure long-term online trading success.
Internet usage has reached an all-time high, with much of the global workforce spending significantly more time online. Some of those who have been affected by pay cuts or job losses have sought to earn additional income in the form of online trading. The number of online merchants has reached all-time highs, so much so that Infinox saw a 28% increase in online commerce volumes in 2020.
While some have reaped the rewards of online trading, successful trading requires some aptitude and skill to achieve long-term gains, including an understanding of the psychological elements involved and having the right mindset in every trade.
Financial markets do not have a sense of ethics, morals or emotion. They are not there to take your money, they are simply a market based on supply and demand. Traders looking for longevity in the market need to relate emotionally to their trades.
According to author Norman Welz, developing an effective trading mindset involves personality modification. From an early age, people are subject to a certain state of mind, influenced by their education, their surroundings, society and their current situation. Once they begin their online trading journey, these influences have a profound effect on their trading decisions.
Emotions such as greed, anger, overconfidence and fear can surface during times of market volatility, however, it is important to be aware of and manage them appropriately. Traders should start by identifying their personality traits. Once they have recognized them, they need to determine how they can negatively influence their trades and tailor a trading plan that takes this into account.
As a model for success, a trader’s plan should take into account additional factors that can influence their success, such as their time, available funds, and tolerance for risk. Being aware of these factors will help traders mitigate any possible risk and ensure that they are less inclined to act on irrational emotions, which could lead to damaging investment decisions.
Apart from this, there are several tips that can help traders cultivate a positive trading mindset, including:
Traders should make an effort to wake up earlier than usual and participate in some form of exercise or meditation, as this will help them approach daily trading tasks in a clearer and more relaxed manner.
Discipline and patience
Patience is not the ability to wait, but the ability to maintain a good attitude while waiting. This is true for online trading, where traders need to learn from their gains and losses, and know when to take a profit or cut a loss, both of which can be the deciding factor between a good or a bad day in the day. the steps.
Learning never gets old
No one knows everything, and in financial markets in particular, education is important to harness the potential of untapped markets and new strategies.
Keep abreast of current local and global events
Current events create market volatility, as evidenced by the free fall of the market during the recent Covid-19 pandemic.
Count your losses
Traders need to control their losses and develop effective risk management tools to mitigate any future risk.
Register your activity
Traders should keep a journal recording their trades. This way, they can spot common mistakes and refine their strategies.
Do what successful traders do
Follow the strategies of successful traders and learn from their mistakes and gains.
By following these guidelines and being aware of the detrimental effects that misguided emotions can have on transactions, online merchants will be better equipped to be successful and last in the field.