7 Winning Online Trading Tips for Success

Online trading is a challenging and complicated activity, potentially very profitable but also capable of eroding capital in a very short time. It's clear that, in a context like this, using the right approach is fundamental. The risk is being subjected to the market, rather than taking advantage of it. In this regard, it's good to summarize the best tips that a conscientious trader can follow, valid for beginners to take the right path and equally valid for experienced traders to stay on track.

Trade with consistency

The basic idea is to consider online trading as a job. To be clear, not in the sense of abandoning your real job, and entrusting your "income" hopes to online trading. This would be a serious mistake, at least in the beginning. The point is to act consistently, in a linear way, to dedicate time and resources, to toil while waiting to reap the fruits of your labor. Online trading, especially for those starting out, must be considered as a life investment, not as a fleeting, occasional activity. Of course, you might realize that you're not cut out for trading, but that's obviously another matter: if you've decided to go down this road, stay focused and don't lose sight of your goals. Consistency, of course, could also translate into intensive trading activity, at least in terms of time. Frequenting the market "around the clock" can be an idea that many can put into practice today. Obviously, the advice is not to stop sleeping and stay in front of the PC to trade, but to make a prudent but decisive use of automatic trading. Obviously, before choosing this tool, it's good to inform yourself: first of all about its use, and secondly about its compatibility with your trading style.

Learn to lose

This is a controversial aspect. Obviously, no one likes to lose, in life as in trading. Defeat is often a traumatic event, or at least difficult to overcome. It's an element that you can't escape, that sooner or later peeks into everyone's lives, yet capable of compromising self-esteem and even making everyday activities more difficult. In trading, defeat has exactly this ability, that is to inhibit activity, to paralyze the trader, to instill feelings of fear and distrust in their soul. Unfortunately, as we have already anticipated, defeat is an ever-present element, certainly in different doses from person to person, but the prerogative of the small as well as the great, of beginners as well as experts. Here, then, it's necessary to come to terms with it. It's necessary to learn to lose, to endure defeat. In short, it's necessary to have a constructive attitude towards defeat. It must be the resource through which you improve, you learn from your mistakes. In trading, this approach is fundamental. Firstly, because no one is "born learned" and theory is often different from practice, so you inevitably grow in the field. Secondly, because the appearance of negative feelings traditionally associated with defeat can have a devastating impact from the point of view of results. In trading more than in everyday life.

Never improvise

This is advice directed particularly at beginners. Experts, if they have become such, have already internalized it for a long time. The reason is simple: if they hadn't, they would never have become experts, they would have thrown in the towel much earlier, afflicted by a dramatic loss of capital. Because that's exactly what happens when you improvise: you lose money and, consequently, you abandon trading forever. Improvisation in online trading is one of the absolute evils, and moreover very widespread. There are many who, as absolute laymen, being dazzled by an advertisement start trading thinking they have arrived in the land of plenty. For them the crash is very hard and definitive. The truth is that online trading is a complicated and difficult activity, with a depth of dynamics that require an abnormal amount and quality of study. Study that must be theoretical and practical. The bad news is that there is no "school of trading", nothing official at least. All aspiring traders are forced to follow the path of the self-taught. The good news, however, is that the material to inform oneself is enormous and easily available: books, ebooks, video courses, online seminars... Everything is useful. In many cases, the training is handled directly by the brokers, who offer guided and modular paths. Then there is the chapter demo, which should not be underestimated: some brokers allow you to trade on accounts with fake money but able to act in the real market. A kind of simulation capable of refining the skills of the aspiring trader and enhancing the final part of their training path.

Analyze in first person

Online trading rhymes with analysis. Or, at least, it should. Regardless of which side you look at the issue, analysis represents an important - and incredibly substantial - slice of trading activity. The principle is as follows: if you want to understand something, you must observe it closely. Hence the need to do the analysis and to do it in first person. To be clear, by analysis we mean both technical and fundamental analysis. The trading community is divided between supporters of one approach and the other, yet they must be considered as complementary. To be clear, technical analysis is the study of data derived from charts, also using statistical tools such as indicators, which use patterns and schemes to launch signals and suggest in which direction the price will move (and to what extent). Fundamental analysis, on the other hand, is the study of what happens outside the market, and able to impact prices: economic news, statements by government or institutional representatives, monetary policy initiatives: everything is able to influence prices. Understanding to what extent they do so, and predicting the outcomes is therefore fundamental. Both technical analysis and fundamental analysis are very complicated activities, requiring in-depth study and a certain amount of experience to be delved into at their best. In reality, fundamental analysis, although it may appear more "discursive", is more difficult than technical analysis, also because it requires more interpretative skills. In any case, it is necessary to produce one's own analysis, and not be content with the "ready-made" ones found online or offered as a service by brokers.

Create your own strategy

This is one of the biggest mistakes that novice traders make and that, in reality, also mows down slightly more experienced traders. It is necessary to create your own strategy, your own trading plan. First of all, because the very concept of strategy / plan is fundamental. Before putting money on the table, you need to know what to do, to what extent to do it and what consequences such action will generate (at least with a certain degree of approximation). The risk, if you do otherwise, is to give in to improvisation first of all, which we have seen to be an absolute evil, and secondly risk being at the mercy of emotions, of the stress determined by discretion. If you have to decide when you are in the midst of chaos, of danger, lucidity inevitably fails. Secondly, it is necessary to create a own strategy, that is to avoid slavishly adopting the pre-packaged strategies that brokers or other industry players offer, often at a high price. Not because these strategies don't work, or hide scams. Simply because a strategy or trading plan can be compared to a dress: to enhance the person it must be tailor-made. Therefore, create a strategy yourself that fits with your being, that is compatible with your trading style. It's not simple, but it's the best way to go.

Pay attention to psychology

In the collective imagination, the trader is a cold, calculating professional, who makes extensive use of his technical skills and who, in some way, coincides with those skills. Laymen reserve a minimal space for the emotional issue, the mental issue. Yet, strange but true, this plays a fundamental importance in online trading. Indeed, perhaps it is the element that most of all affects the results. There are numerous books, manuals and ebooks that talk about the relationship between trading and psychology. The winning trader, in fact, is the one who first of all manages to dominate himself, more than the market. The trader's worst enemy is not others, it is not the irrationality of the market, an indicator that does not do its duty etc, it is... Himself. It can be the biggest saboteur. This, let's be clear, in one direction or the other. Both when emotions are positive and when they are negative. When the trader is pervaded by negative feelings such as fear, trading activity is stopped, blocked. When the trader is euphoric, happy, overly confident he becomes reckless and puts capital at risk. So, pay attention to psychology, and your emotional reactions. The advice, always and in any case valid, is to reduce discretion to a minimum. Always follow your plan, because it is at the moment of decision, especially if the time to decide is short, that you are weakest.

Choose good travel companions

Obviously, online trading is mainly a solitary adventure. You are alone, and in particular alone against everyone. However, this does not mean that there are no travel companions. The reference is above all to the broker. It is impossible to do online trading without a broker. Now, these brokers always affect the results, if only because they are responsible for creating a trading environment. If this is fast, effective, error-free, all is well. The problems begin with malfunctions. In the case of market maker brokers, then, their role is even more present and impactful. So, choose a good broker. Choose it first of all honest. From this point of view, the system of licenses and regulations is quite effective in being able to discriminate the good from the bad. Honesty, however, does not always rhyme with quality. For this reason, you must also analyze other elements. First of all, the costs: how many commissions (if any) does it impose? How much spread? Are margin operations contemplated? If so, how much are the levers? Other elements to analyze obviously concern the breadth of the offer, which includes assets, investment products and platforms, as well as the quality of assistance and training content.