Investing is a game of numbers, and the more you know about stocks, the better off you’ll be. It’s not just about buying low and selling high; it’s also about knowing when to buy or sell. And that requires knowledge of market psychology.
A traders union is a place for like-minded individuals to share tips and tricks, ask questions and learn from one another. It’s also an easier way of finding new opportunities that might not be available otherwise; we’re all subject to the same market conditions (for better or worse), so it’s important to make sure you have someone looking out for you.
The 8 Secrets trading in eToro, for example, takes stock of what traders need to succeed in this volatile industry by breaking down eight important principles for success: Price action, support levels, volume analysis, risk management techniques, trends & momentum indicators, time frames/cycles, and position size.
- Price action is the method of matching up a stock’s current price with its history, in other words, understanding where a stock has been to predict where it will go from there.
- Support levels are important because they define an area that should be traded at or near during market declines and thus help stabilize a trading portfolio when prices fall below them.
- Volume analysis is a way of determining supply and demand by analyzing volume. Volume has been called “the voice of the market” because it reveals what traders are thinking about at any given moment in time.
- Risk management techniques help keep your trading account intact when markets get volatile, which they always do sooner or later. Remember: even the most successful traders go through down periods, and knowing how to protect yourself from those inevitable fluctuations.
- Trends & momentum indicators are a way of measuring market direction by looking at the current price data compared to past performance. However, market timing can be difficult because it’s not always clear which trend will continue or when one has changed into another.
- Time frames and cycles are a way of understanding the market’s past, present, and future performance by looking at price data over different periods. Knowing what time frame to focus on is important for success as a trader because it helps you determine how much risk to take in your investment decisions.
- Position size, like risk management techniques and position sizing, is another way of protecting your trading account when markets get volatile. In addition, it helps you determine whether or not to take a trade in the first place.
In conclusion, the best traders are those who spend time learning from their peers, growing in knowledge and experience by applying what they’ve learned. So take a look at the eight principles of successful trading above to help you grow as an individual while achieving success for your portfolio.