Posted by forex at 4:50 AM
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1. Know who you are. Take the time to examine your strengths and weaknesses; if you are unsure, take a personality test. Numerous free tests are available on the Internet. Ask yourself how you will react to various market situations. Your answers will give insight as to which trading method will work best for you. You want to avoid a trading system that is outside your comfort zone.
2. Examine your decision-making process. Impatient individuals or those who are able to make quick decisions will gravitate toward day trading. Methodical individuals who take more time for research before making a decision will be more comfortable with long-term investing. It is important to consider how your decision-making will hold up under stressful conditions, as this can impact your results.
3. Build a solid foundation of knowledge so you can make informed decisions. Discover what kind of markets best suit you. Learn and experiment with different trading methods and then choose the one that is right for you. You should be comfortable with the risk level and time frames involved in your trading method.
4. Be disciplined. Stick with your trading method. Your method sets the ground rules as well as the limits for trading. By adhering to your plan, you will experience greater success. Investors who deviate from the chosen system often see significant damage to the bottom line.