The information age has made investing accessible to everyone. Each day, millions of traders access the financial markets to build wealth and sharpen their skills with little more than an internet connection and the enthusiasm to make money buying and selling securities. However, if you’re like most online traders, you don’t have the luxury to trade full-time. Therefore, time management may make or break your success. These six trading tips may help you manage your time as you build the knowledge and skills needed to excel in the world of financial trading.
- Increase your time in the market instead of timing the market
Many new investors get so caught up with the idea of “buying low and selling high” that they fail to learn basic investing principles and one of these is unnecessary or poorly considered trades. This not only cuts down on transaction costs, it keeps you focused on sound investing strategies – namely, finding the right security to buy and hold. Most of your time in the markets may be spent researching and comparing securities before you consider buying them, so that when you enter a position you’ll spend less time worrying about it.
- Prepare your charts well in advance
If you intend to day trade or buy and sell securities with more frequency, you should consider setting up your charting tools well ahead of time. This is especially true in the forex market. You may consider starting by setting up all of the necessary charts for the asset you intend to trade before you start trading. Most online brokers offer standard trading platforms like MetaTrader 4 that give you instant access to your preferred charts each time you login.
- Learn technical analysis and rely on it most of the time
Technical analysis is the study of past market data, such as price, volume and trends to predict future price activity. It’s all about analyzing data to better predict where the market is heading. There are literally dozens of technical analysis indicators you can use. By focusing on a few, such as price-based indicators, volume-based indicators, moving averages and trend lines, you will quickly realize that history often repeats itself.
- Set up stop-loss orders
Part of being a mature investor is realizing that not every trade will go your way. Even the most conservative investor realizes the market isn’t always predictable. If you are day trading or trying out riskier securities, it’s a good idea to consider putting a stop-loss order. A stop-loss simply tells the broker to sell a security when it reaches a certain price, thereby limiting a trader’s loss on a position. The stop-loss order is issued automatically when the security reaches a certain price, saving you time that would have been spent deliberating or planning your next move.
- Trade more efficiently by setting up alerts
If you are using an online broker, you can easily set up alerts that notify you when your security has reached a certain point, such as a key support or resistance level. This is especially useful when managing multiple trade positions. Instead of spending your time monitoring each position, you can free up valuable time by letting your platform monitor key price levels. Once the security hits the support or resistance level, you can quickly decide whether you want to enter the trade.
- Consider mobile trading
Many online brokers allow traders to buy and sell securities on their mobile devices. This is an extremely valuable time-saving strategy, especially if you’re not always at your trading desk. The five principles described above may easily be applied to mobile trading, allowing you to monitor your trades anywhere, any time.
These strategies, when employed correctly, may help part-time traders manage their trading accounts without it affecting their other commitments. The more time you spend analyzing the financial markets and refining your trading strategy, the more likely you are to succeed.
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