This special checklist is a perfect tool for assessing how safe the trade is. Try using it now and you will be surprised how easy it is to avoid taking extra risk.
Just remember these 5 rules before making a trade:
Make sure you’re calm and confident. Any strong emotions prevent you from getting good trading results.
Feelings of resentment, anger, excitement, and even excessive enthusiasm do not allow you to critically assess the situation. A trader must have a cool mind and a regular pulse.
If your emotions are running high and your heart is beating fast, take a walk down the street or just relax. If you’re fine, go down the checklist.
You should clearly understand what a trading signal looks like and open a trade only after you have received it.
If you have no strategy, you can get one here. Here are some examples of trading signals:
- The RSI indicator is in the oversold area
- A false breakthrough of the resistance level
- An intersection of two moving averages
- A negative report on a country’s GDP
Got a signal? Move on.
The trade amount must not exceed the daily limit, which you have set in advance.
If you limit the loss to 10% of your deposit per day, the trade amount should not exceed this level. If your trade amount complies with this rule—get to the trend analysis.
Take a close look at the chart and determine long-term and short-term trends for making a trade.
Do you want to protect yourself from losing trades? To do it, believe in the trend’s strength and follow it. Look at the direction of the asset’s price movement during the last hour/4 hours/day or a week.
If your strategy does not provide a signal to trade against the trend, everything is fine. There is only one point left.
Once again, think whether you choose the right time to make a trade.
Sometimes traders do not choose the right time for trading:
- 10-15 minutes before some important news comes out or the same period after its release.
- Before the release of a company’s financial report (if you trade stocks)
- Periods of the lowest volatility. For example, the end of the Asian session or right after the close of the US trading session.
It is more difficult to make winning trades during these periods than under normal circumstances. Trade at some different time.
If the check of these 5 points is successful and there is no violation of any condition, open a trade and earn.
Of course, even such powerful filters fail some day, but they will help you make your trading more disciplined and profitable. You will achieve your goals in 2020!
Bookmark or print this page and use our checklist every time you start a new trading day.