Be afraid when others become greedy and greedy when others are afraid. The sentence comes out from the high-class investor Warren Buffet. It means a suggestion that trading should not be based on greed and fear, both of which often envelop the trader’s emotions. When the market is in a massive buying action, we go along with buying.
However, we do not know that the price is near the peak, so not long after buying the price back down and traders lose. Likewise, when there is a massive selling action, we go along with selling when the market is oversold. Additionally, there will be a reversal in the direction of strengthening soon. That is because emotions overwhelm us and we do not use market indicators that turn out to show signs of a downward or strengthening price trend. To overcome your trading problems, you need to follow the tradinf principles to maximize your profits.
Check out these 10 Trading Fundamentals to Boost Your Profits:
1. Trading based on a plan
Good trading is planned, not just buy and then sell or just based on feelings. According to Forex Traders, trading the forex or any other financial market without a plan is almost a sure recipe for failure. The market can change direction at any time, so you have to prepare what percentage of capital is used, what is the limit of losses that are tolerated and how much profit is targeted. After that, you must be consistent with your trading plan.
2. Trading following the direction of the trend
It has become the main formula in the trading world so that you will never go against the direction of the market. Therefore, when the market is bullish, place a Buy position as well as a bearish market, place a Sell position.
3. The entry position matches the criteria of a trading plan
Each trader has their trading plan criteria. For example, a trader has criteria when to enter the market using the two moving average (MA) line method, which is MA 50 and 100. You can place a Buy position when the MA 50 line from below has crossed with the MA 100 line. Conversely, when the MA 50 line is from the direction top of the crossing with MA 100, it is a good time for Sell position.
4. Pay attention to the economic data scheduled
If there are no geopolitical factors or trade policies that shake the market, economic data will determine the direction of the market and its volatility. Pay attention to the economic schedule when you want to start trading. If the data is positive then the direction of the product price movement will strengthen and place a Buy position. Besides, if it is negative it will weaken and you should place a Sell position.
Writer: Fenda Agustina
Read more: 10 Trading Fundamentals to Boost Your Profits (Part 2)
