In the market, there are 4 pillars of trader is existed. If you are aware of those pillars. I guarantee you will be the next trader. Before trading anywhere in the market, it is important to know that trading without any setup can be risky to a trader.
In this post, we are pointing out some important topics with the help of that you can improve your trading. That concept is not hard to follow but that concept can bring much knowledge to you in the market.
Table of Contents
Money- Risk management and money management
For whom money is not important? Saving money is important and investing money is also important. We have seen such people who get a lot of money, but they cannot manage it and after some time they come back to the same work which they used to do a few time ago.
In this trading pillar, we will learn about how to manage our money. Without managing money will not last long. To manage we have two things, first is risk management and the second one is money management.
Risk Management- It is very important to manage risk while trading. If you don’t manage risk while trading, you may lose your capital. In risk management, the first thing to do is to know what is your risk, how much risk are you able to take in a trade, all this you have to manage before jumping into the trade.
Risk management makes your decision-making process easier. You can identify the risks and monitor well how much you are capable of losing so that you will not have any difficulty in making any kind of decision.
Money Management -=- It is not necessary to save money but it is necessary to manage the money. You know very well that if you have not managed the money then it will not last with you for a long time. Because it has money through which the money goes to someone else. An important principle of the trading pillar is to manage your money in such a way that it makes money and money.
Market – Technical and fundamentals of the market
To trade in the market, two types of analysis always have to be done by the trader. First technical second fundamental analysis. Technical analysis is performed on charts and fundamentals analysis is performed on the company’s position.
Technical Analysis =- The technical analysis is performed on the chart. In which analysis is done on the chart with the help of various tools. In this, there are many tools like trend lines, indicators, candlesticks chart patterns, volume analysis, and support and resistance. We know well that technical analysis plays a main role in analysis. It helps to improve trader decision-making psychology.
Fundament Analysis =- Analysis with fundaments we can find out the actual value of a particular stock, currency, or bond. In this analysis, we shed light on the growth of the related company. Investors do fundament analysis before taking any kind of position in the market. Fundament analysis can be done with the help of financial statements, earnings and valuation, industry and market trends, management and governance, macroeconomic factors, and qualitative factors.
Method- Your trading plan, your trading rules, and indicators
If you don’t have any road map to follow to getting success. Maybe you will not be able to take any single setup toward a bright future in trading. To achieve success in any business, it is very important to have a clear path. Without a method, we cannot be successful in any business.
Often you see the collapse of such businesses that have no foundation and don’t have any method of working in this field. Without method throw the arrow in a blind mood.
Your trading plan & rules =- While deciding your method, you must know your trading plan and rules. If you trade without any trading plan and rules, you may have to suffer huge losses. The plaining is the beginning of everything if you don’t do planning then you can’t do anything.
trading indicators =- Trading with indicators is crucial for improving your trading style. But we have seen many trading indicators are not useful for trading. Because the indicator depends on price and chart. If we talk about the most reliable indicators then the name comes to light that is RSI. But many indicators are most useful from one to one.
Myself- Your trading psychology and your emotion
Often you must have seen when emotions overpower the trader. So the trader loses his temper and then gives his control to emotions, after which the emotion trades so much that his fund will either become 0 or there will be such a huge dent in the capital that he will not be able to recover quickly.
When your trading psychology gets spoiled then the trader will start feeling afraid of trading. Often you must have seen that sometimes a trader becomes so confident that it turns into overconfidence, which also leads to losses in trading.
Often you have seen such people who sit in loss for a long time but they cannot sit in profit. Such people only accept profit and not loss. However, profit and loss are two sides of a coin. If you If you expect profit then you will have to bear loss also. The one who is not in the habit of bearing loss, his entire trading psychology gets spoiled and his complete control comes under the control of emotions due to which he incurs huge losses.
