When you slowly develop yourself as a better trader, you will find the difference between the beginning and intermediate stages in trading. However, as a beginner trader, one will find that there are huge things to discover. First, a trader must need to master the following five futures trading skills.
Chart Reading Skills
A long-term position trader or futures investor needs some serious chart reading skills. However, not necessarily the trader needs to follow every chart type, including bar, candlesticks and line charts. Also, the trader doesn’t need to follow the more esoteric charting approaches like the Gann theory of the Elliott wave.
A trader must know the meaning of chart reading skills:
- According to your trading style, which charts offer the relevant information.
- Why the trading style matches with it and
- How to simplify, shift or enhance the graphs according to the market situation.
A swing or day trader, when making the trading decisions, most likely relies on the charts. Plenty of charts are available in the market and markets different aspects reflected by each type of charts. Each chart should choose wisely because each chart has limitations and advantages.
Learn to analyze price action signals
If one relies on the lagging indicators, they need to be cautious with the lagging indicators. Sudden price movements can disrupt due to the predictive model’s projections such as Elliot Wave, time series, or Fibonacci projections. Real-time shifts in demand and supply reflect by these sudden price movements. Throughout the day the market condition can change easily, and the price is affected by such change in the short, long, or intermediate-term. Join here and learn more about the price action trading method as it will make you a better trader.
Learn to Identify the Trend Direction and Reversals
Identifying the trend direction and reversals may seem easy, but it is tricky. With any degree of accuracy, one cannot predict the reversals or trend continuations. However, by anticipating the trend, one can adapt quickly to the multiple outcomes.
First, overcome the fundamental errors and learn to trade with the trends. Then, based on the real-time price data, know your trading time frame and use the trend evaluation means. By looking back only, one can confirm the trend. However, their turns and continuation happen in real-time.
Risk Management Just Not a Tactic, It’s a Strategy
If you worked in the industry for some time, you must find that traders whose accounts blown up, 90 percent of them use the stop losses. Their accounts have blown up because they failed to use the funds strategically. They use only stop loss as a strategy, and they did not have any risk management strategy. However, the stop loss did not do any good to them.
Understand the Trading Psychology
You need to follow and practice few principles, and knowing the behavioral theory is necessary. Natural fear is not a bad thing, and your account may blow up if you are over-optimistic. Try to trade this market with a balanced mindset and only then you can succeed in the retail trading industry.
If your trading risk capital is excessive in amount, then your money management strategy may not afford the trade. Again, the trader may have obsessive fear, and obsessive fear is not reasonable all the time. Despite your trying, if you failed to trust your system, you probably did not evaluate your design in full swing.
To conclude, sometimes you will fail to operate trade according to your plan even after having sound risk management principles or a solid transaction strategy. Then try to self-help because, in this position, only self-help advice may prove helpful for you, and just quit trading for some time. Avoid making an excuse in the name of psychology, and don’t be irresponsible and don’t make poor decisions, and take responsibility for your actions.