Thread by @SquareoffIn

⚡️5 Tips For A New Trader-How To Turn Profitable Trader

You must have started Day Trading, 6 months passed…1 year passed….2 years passed…. you’re still not profitable or maximum at break-even.

Are you in the same situation?

#squareoffthreads🧵👇

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1) The law of large number(Probability) in Trading

The law of large numbers says that if the probability of something happening is X%,

the result will approach closer and closer to that probability the more attempts are made.

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If you toss the coin hundred times and record your results, you will find that the result is very close to 50%.

Same applies in Trading. Result is close to 50% on big sample of trades.

Remember, It’s impossible to be profitable every day, you should have a long term goal.

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Because your trading results are random in the short run.

That doesn’t mean now you will start taking 10-20 trades per day to reach 100 trades.

You need to take trades only based on your strategy rules, which is backtested and has edge, not random trades.

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2) Find a Trading Style that suits your personality

The Market Wizards book has interviews of top traders in the world.

Every trader has different style, not all are following same system….that means you need to trade the trading style which suits your personality.

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3) Develop your Trading plan

But…How to develop Trading plan….

•Decide your Capital
•How much Risk per trade?
•Decide your time frame?
•Which market you want to Trade?
•You want to be a scalper or Trend follower?

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4)Time to execute your Trade

Once you’ve completed your trading plan, it’s time to enter the market and take your trade.

I would suggest starting really small when you are new, your capital should be small that it should not affect you emotionally even if you are losing.

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When you execute your trade based on your strategy…. 1 of 5 things can happen.

1. Break even(no profit/no loss trade)
2. A small win
3. A big win
4. A small loss
5. A big loss

First 4 are fine, but it should never be 5th one,

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Remember, in the short run, your trading results are random,

means you need a minimum of 100 trades, before coming up with a conclusion whether your trading strategy working or not.

Never jump from one strategy to another because you went through 3-4 losing trades.

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5) Record your trades and improve your trading performance

Recording your trades most important in trading, maintain a trading journal and record all your trades whether it is in profit or loss.

Shared by Vikram Prabhu.

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