When an amateur trader first enters the trading industry, he might feel a bit overwhelmed by all the fluctuations and numbers that work behind a trade. Well, it is completely normal given that all trading sectors are equally dependent on charts and research. So, if you feel like not knowing anything when you first start here, don’t feel inferior. You can take your time to educate yourself in all the useful information. But you also need to make sure that you are being consistent enough in your profession. And, if you are looking forward to being a successful trader with a low loss percentage then you need to make sure that you are shunning your skills. Now many may ask how to develop these skills? Well, acquiring skills here means to know the trading tools, to execute trades properly, to speculate the market and many more.
There are several pieces of information out in the World Wide Web to help you with your skill development so you don’t need to worry about that. But, before you go and search for them, here are some of the most important criteria that you need to build your skills.
Understand the financial charts
If anyone asks what is the basic of trading? Your answer should be to read the charts. You cannot expect to do good in trading if you don’t know how to read the charts. This is like hiking without a compass. A chart helps you to find the right direction to make a trade. it shows a trader the right time frames to make transactions. So, it is inevitable to read the charts if you are willing to be an experienced trader. Now, in Forex, 3 types of charts are the most prevalent; candlestick chart, bar chart and line chart. Bar chart and line chart use geometric lines to indicate price movement whereas the candlestick chart uses candles to show the bullish and bearish trends in trade. In the stock market, stock charts are used to show the support and resistance, trendlines so that investors can find their way to invest in stocks. But as a novice UK trader, you could try here and use the demo account offered by Saxo. Use the free account and try to develop the basic skills with zero risk.
Trendlines are your friend
A trendline is an important tool when it comes to speculating the trading market. An accurate trendline helps to show whether the price is going up, down or sideways. In that way, traders decide whether to buy, sell or hold on to their stocks. It also indicates the duration of a trend and the estimated time of ending that trend. Trendlines are drawn based on price movements for a particular duration. A trader can make up his customised trendline by plotting the prices in the graph. When the small fluctuating straight lines are smoothened out, we get a single straight line which shows where the market is going. This is a good measure when it comes to trading successfully.
Know the indicators
Many traders remain oblivious of the importance of economic indicators in trade. But when it comes to market speculation, these indicators are your biggest weapon. The economic indicators work as the insiders of the economy of a country and give traders the insight into how the economy would look like and whether it would be profitable to invest in that economy. Now many may ask where to find information about these indicators. Well, all these data are subject to the news release and if you constantly monitor the news outlets of a country you will be able to gather such information.
Time frames are what you need to execute your trades properly. After much preparation, if you fail to execute your trades rightly, you may lose the trade. That’s why you need to be aware of using the right time frame that matches your trading style. For an instance, day traders should stick to higher time frames where traders can get enough time to decide and invest and they also need not monitor the charts constantly. The concept of time frames is pretty simple but very important when it comes to skill development.
Skill development in trading is something without which you cannot curve good profits. So, as a trader, one needs to be enthusiastic to gather skills and learn passionately. Because better learn than lose right?