Trading is not just an occupation or a career choice. It’s a lifestyle that allows you to become more affluent based on your own skill. In trading, there’s no fixed pay and no fixed commissions. Everything that you earn, you’ve earned by your merit.

In theory, everyone can make it in the trading world, but this is not always the case in practice. Only the strongest in mind and willpower, only those who are willing to fully commit to this lifestyle, will get to enjoy the fruits of their trades.

So, for those considering this, here are the top seven trading tips you need to hear.

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1.  Have a plan
The first thing you need is a plan. Having a great idea is always a positive thing, but it’s the execution that might be lagging.

•  How much money do you need to get started, and where is this money getting from?
• How much money can you afford to lose?
• What are your general sentiments about entering and exiting trades?

Answering each of these questions is pivotal for your survival in the industry. You need to figure out this before picking your trading of choice. In other words, these principles are universal, regardless if you’re buying stocks, crypto, currencies, or trading on FOREX.

Time is also incredibly important. Position traders and day traders are on entirely different ends of the spectrum. As a day trader, you’ll have to spend countless hours programming your trading app (to do everything automatically in a reliable way) or spend hours looking at the screen. As a position trader, on the other hand, you’ll have to freeze a part of your assets for an unknown period.

Each has its drawbacks and advantages.

2.  Adopt the right mindset
To be a successful trader, you must understand what you’re getting into and adopt the right mindset.

First, you need to learn how to manage your emotions. There are so many psychological pressures in trading. For instance:

•   You may be susceptible to FOMO (fear of missing out). This is the idea that the offer is so lucrative that everyone will get rich off it (everyone but you). This pressures people to buy and sell even without objective reasons.
•  Positivity bias is the idea that good things are more likely to happen than bad ones. It’s a primal coping mechanism that allows humans to maintain hope even in the darkest hours. Sadly, this is not always true.

You need to take your emotions out of the equation and stick to your strategy (which we’ll discuss later).

The key is understanding that things will get tough before they get better. Every start is difficult, and even if you have your run of beginner’s luck, you might want to get familiar with the Dunning-Kruger effect.

3.  Pick up your tools of the trade
One of the most important things to remember is getting the right tools for the trade. Today, everything happens in the digital world. This means you need to find the right platform to trade on, use all sorts of monitoring tools, etc.

You must understand just how important the choice of the platform is. Different platforms have different fees. These fees are just a cost of doing business on the platform and don’t generate any extra value for the user. So, trading with low fees is in your best interest. You first want to determine which platform will allow you that.

Remember that a trading platform/broker offers more than just low fees. Regardless of popularity, some platforms may not have an Android/iOS app. This can be problematic for someone on the run and planning to trade via phone.

Remembering that you’ll spend hours staring at this screen is also important. This means that you must like the UI and find it convenient.

Take your time to ensure you’ve made the right choice.

4.  Be ready to learn
Next, you should understand that your willingness to learn determines your success. You can’t just look at the number changes and charts without understanding the theory behind it. We’re not suggesting that you have to become a master economist, either. This is an imaginary gatekeeping that you don’t have to worry about.

For starters, you need to learn the technical aspect of the platforms that you’re using and the financial processes that you’re engaging in.

Next, you must actively inform yourself of the asset you’re trading in. If you’re investing in crypto, you want to learn about the technology behind those specific coins. With the stellar rise of crypto adoption, this becomes an even more important factor to track.

Staying informed is vital. Let’s say you’re trading on FOREX, and one currency in your favorite pair is GBP. In that scenario, you’re interested in everything that happens in GBP-using countries, from political and societal, to economic changes. Monitoring these underlying factors will help you be a more successful trader.

You also want to learn from your mistakes. Gaining experience is a complex process, and while you can listen to the advice of others, it’s never the same thing.

5. Adopt the right strategy

Another thing you need to do as soon as possible is to adopt a trading strategy. A lot of people try to make every trading decision in a vacuum. This means that they adopt a completely different pattern of trading behavior with each new trade placed.

Some strategies just work:

• Buying and holding
• Dollar-value trading
• Trend trading

Each of these gives you a unique approach to trading as a whole. Doing so helps set some essential parameters for you to learn the ropes. As they say, you need to know the rules to break the rules to your benefit.

There’s also a psychological problem with changing your trading strategy too often (or failing to adopt one to start with). What if you trade three times the same way, and your previous method makes it the first time you change the pattern? Imagine how horrifying this thought would be. By adopting a trading strategy, you’re making the probability of this less likely.

6.  Learn how to use stop orders
Previously, we gave you a tip to try being less emotional. This is a feat that not everyone can pull. Fortunately, you can automate your decision with a stop order.

Simply put, you can set an order to sell or buy a certain asset when its value reaches a certain pre-set point. This way, you eliminate second-guessing yourself before clicking that sell/buy button.

There are two types of stop orders:

• Stop-loss order
• Stop-buy order

These orders exist to protect you in open-position trading.

To explain better why this is so important, we’ll give you a fun piece of info. If you set your stop-loss order at 1-2% of your total trading pool and your stop-buy order at 6-7%, you can be profitable with as little as 25-30% of successful trades. This type of reliability is what you need to make it in the trading world.

7.  Start small and scale
As we’ve mentioned, you need experience, and the only way to get it is to go out there and start losing money on trades. It sounds discouraging, but it doesn’t have to be that bad. If you start small, the losses will be manageable, and you’ll gain invaluable first-hand experience.

You must see exactly how it all works - the assets, the market, the trading platform but it’s also essential to know how you work under pressure. Remember, this is not for everyone. You’ll have to spend hours doing it, so it might not be worth trying if you don’t like it.

So, our last tip is that you should start small and scale up your trading operation.

A step-by-step approach is the best way to enter the trading world
In the end, you want to trade, not gamble. This means that making a successful trade is not enough. You should also be able to repeat each of these successful trades in the future. The only way to do so is to systemic all your trading patterns and behaviors. The simplest way to do so is with a step-by-step approach, like the one described in this piece.

A step-by-step approach is the best way to enter the trading