Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow


First time visiting? Consider subscribing or the following:

5 Rules to Follow For Success in Copy Trading

Posted on | January 18, 2018 | Comments Off on 5 Rules to Follow For Success in Copy Trading



When most people are interested in starting a copy trading practice, they only spend a few minutes searching the web for the cheapest trading platform subscription. If this has been your approach so far, you won’t get more than a few tidbits of information. And that can do more harm than good for a new trader.

We get it – you want to get the right starting point, set up a couple of charts, and start making some money now. But, if you want to run trades that generate profit, you will have to do a lot more than that!

What you need is some actionable advice. This is especially true when it comes to the rules that guide all traders, despite the size of their trading accounts.

On their own, each rule is vital. But when they are used together, they produce a much stronger effect. Trading with these rules ensures that your odds of succeeding in the forex market increase exponentially. That said, here are 5 rules to follow that will make you a force to reckon with:

1. Always Have a Trading Plan

Simply put, a trading plan is a written set of rules that define when your criteria for entry, exit, and money management. Although creating one can be a little time consuming, a trading plan can keep you from making costly mistakes in the long run.

And even better, technological advances make it easier to test a trading plan before risking real money. By applying your ideas to historical data, you will be able to determine if your plan is viable. Backtesting also proves the expectancy of your plan’s logic.

Once you have a well-developed plan and testing shows good results, you can then start putting it in action. The key here is that you have to stick to the plan. Running trades outside of your trading plan is a hallmark of poor trading. Even if these gambles pay off, they destroy any expectancy that your plan might have had.

2. Treat it Like a Business

If you want to succeed at copy trading, you have to approach it as a part or full-time business. You should never view trading as a job or hobby. This is a surefire way to kill your own commitment and dedication to the practice. Not only will this make trading frustrating, it can also have serious implications for your wallet.

A lack of commitment can make trading a very costly affair. You will make expensive mistakes because you haven’t taken the time to perfect your knowledge or skills.

All in all, copy trading is a business that incurs its own taxes and expenses. You will have to be ready to shoulder all the uncertainty, stress, risks, and losses – just like any small business owner. That’s why you should take time to research and plan in order to maximize the potential of your business.

3. Protect Your Capital

It’s important that saving enough money to fund your trading account can take a lot of time and effort. And that’s just the first time! Every successive round to raise capital will become more and more difficult.

That’s why it is important to protect your trading capital. This doesn’t necessarily mean you have to prevent all losses. Every trader will have to take a hit now and then; it’s the very nature of the business. That said, protecting your capital means avoiding all unnecessary risks and doing your best to protect your flourishing trading business.

4. Start Studying the Markets

Successful copy trading is all about continuously educating yourself. So, your main goal should always be to learn something new every day. Also, keep in mind that understanding the forex market and all its nuances is a continuous, life-long process.

Research will help you learn the hard facts such as what various economic reports mean. But sharpening your focus and observation skills will help you gain invaluable instincts that may determine your trading success. These skills help you understand how the facts will affect the market that you’re trading in.

5. Using Technology to Your Advantage

Trading is a highly competitive business. One of the only ways to gain an edge is by using technology to your advantage.

As a minimum first step, you must join a renowned trading platform like https://realtradercommunity.com/. This will help you meet experienced traders to copy, as well as identify the various trading strategies that they use.

You can also use technology to analyze the market or backtest an idea based on historical data. This approach will help you take calculated risks, avoid unnecessary ones, and save you a lot of money in the process.

Finally…

Copy trading is a great way to add an additional stream to your income. But, if you want to ensure your success, your best bet is to follow these rules for copy trading to ensure a long and profitable career.