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7 Keys to Successful Financial Trading

14/2/2014

50 Comments

 
7 Keys to Successful Online Trading
Most small traders (i.e. the home-based independent speculators) end up losing money when they trade the financial markets.  Statistics say that 95% of these traders lose over time – which is why the investment professionals refer to them as the “dumb money”. 

We’ve all been there at some time in our trading careers.  Some initial successes which hook you and then a run of losing trade after trade and not knowing why, or what you need to do to break the cycle…it doesn’t take long until your funds have expired and you feel stupid!

Imagine what life is like when you consistently end up on the winning side!  We’ve been there for a good few years now and it’s not by chance. 

To help ensure your chances of success, make sure these seven key recommendations are part of your trading strategy.

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1 - Know your market

Do your research.  Decide what you are going to trade and stick with it.  Learn everything you can about it in as much detail as possible.  Even if you are going to be a purist technical trader, you still need to understand how the different macro-economic events impact your chosen market so that you don't get caught out.

We are gold traders and have been for many years.  We don’t trade anything else.  We have previously traded the forex and equity markets, but our passion is gold.  We know an awful lot about the gold trading market, but there are always new things to learn.  Our days are spent, alongside watching the market for trading opportunities, making sure we continue to learn more.

2 - Plan each trade

Don’t make hasty (often costly) decisions without doing your research first.  Have a routine where first thing every day you do a top-down analysis of each charted timeframe for your chosen market and gauge where you think things stand – what is the prevailing trend?  What timescale is the trend over?  Where are key support and resistance points?
Successful Online Trading - Plan Each Trade
You have to plan where you are going to buy or sell, where to place your stop loss and most importantly where to exit the trade.  Then, once the trade is planned and executed, you must show discipline – you made the trade for a good reason with solid justification, so any changes need equally solid justification.

3 - Keep losses small and maximise winners

This sound obvious, of course, but it’s often traders doing exactly the opposite of this that accelerates them along the path to financial ruin.

If it’s clear that the trade is going against you, get out quickly.  In many cases a trade will go the wrong way at some point – it’s not always possible to pick the perfect entry point and so you need to allow room for the trade to breath as it confirms a bottom/ top or performs a natural retrace after a big move.  But if it’s clear that market conditions have changed it’s best to cut your losses and move on to the next trade.  Never widen your stop-loss position in the hope that things will turn around.

Conversely, when the trade is running the right way don’t panic and take your profits at the first sign of it stalling.  Sometimes this makes sense when the market is clearly turning or if your initial pre-trade assessment wasn’t accurate and so you are lucky not to have lost; but generally it’s wise to keep the trade open and just keep trailing your stop-loss position in behind the trade to stay in the game as long as possible.

If you look at our trading history, you’ll notice that (as of 27th Jan 2013) our average winning trade is $37 (or 370 points) and our average losing trade is $19 (or 190 points) – this, coupled with having more winners than losers, is why we are successful gold traders.

4 - Remove emotion

To be able to make the key decisions which keep losses small and maximise winning trades, you need to remove the emotion from your decision making.  There is a tendency to become too emotionally involved with a trade once it has been placed, and to want the trade to succeed too much.
Successful Online Trading - Be Cool as Ice
Therefore, novice traders tend to let losses run too long, by either widening stops or ignoring signals that the trade is going wrong, in a desperate attempt not to lose money.  All that happens is when you do eventually lose, the loss is a huge one. 

That means that when the next trade is opened there is even more pressure to succeed or it may be the last one…and so on.

Removing emotion from trading decisions is a very hard discipline to master, but it gets easier as you become successful.   Following a method over the long-term which has paid dividends gives you confidence - when short-term setbacks occur they no longer affect your judgment.

5 - Develop a money-management strategy

Money management is vital to sustained success – many traders risk far too much of their available capital on each trade chasing the “big win” rather than a sustained, gradual and controlled growth through smaller more manageable trades.
Successful Online Trading - Manage Your Money
Our own money-management strategy could be seen by some as quite aggressive, but it works for us as we’re so confident in our trading strategy after so many successful years. It is also geared in such a way that we will never lose more than we can stand on any single trade.
You need to find the right level that suits your funds, risk appetite, style and frequency of trading.

6 - Don't overtrade

Whilst trading could, and should, be enjoyable you need to be careful that you’re not getting caught up in the excitement of “the gamble”.  All too often we see people placing numerous trades each day on multiple markets – placing too many trades that haven’t been planned just for the buzz of being in the game.

We usually make just 2-4 carefully planned trades a month (and some months we sit it out completely if there isn’t an obvious set-up) as overtrading means more money is lost on commissions and spreads and the likelihood of losing is higher as trades are more frequent.

7 - Never chase a loss

When you do suffer the inevitable losses never jump straight back in to the market in an attempt to put things right – it rarely works and, if it does, it’s usually more luck than judgement.

Accept that losses are just as much a part of trading as winning.  You need to be able to deal with them without it clouding your judgement – we know this is sometimes hard, especially after a run of heavy losses.  If you’ve followed the other tips in this article, you shouldn’t be getting too many big losses in the future anyway!

Always step away from the market after a loss and reassess.  Regroup, plan your next trade and re-enter only when there is a setup on the table which fits your trading strategy.

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50 Comments
dgf link
30/1/2013 09:28:53 am

good

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Dave
9/9/2020 03:28:14 am

Some of you might not know that we are already on the gold standard as of Sept 1, 2020. The QFS (Quantum Financial System) went into effect on Sept 1. All 209 countries are on the gold standard for their respective sovereign monies. It is supposed to be announced on Sept 8 or the 15.

The different tiers are in process of setting the revalue. Here is a link to the timetables:



https://inteldinarchronicles.blogspot.com/2020/09/restored-republic-via-gcr-update-as-of_8.html?m=1





Dave

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Boris DJuran
30/1/2013 11:05:05 am

Example...when silver started falling from $43, I bought at $37. That was over a year ago. It stayed at the $27-$34 level since. I have traded down there and did ok. But I am still holding the $37. I don't need the funds. Should I hold or sell ?

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UKGTE Customer Services link
30/1/2013 11:42:15 am

Thanks dgf.

Boris - we're not experts in silver and so don't have a view on where that market is heading. It's a difficult call as you are so far in to the trade, but we'd be looking for a sensible place to cut losses and write that trade off; then sit on the sidelines and re-evaluate your position. Don't be too eager to jump back in - just wait for the next clear trade to set up.

You could always sign-up and follow us in gold :)

Reply
Ian
22/8/2015 01:57:33 pm

Thanks for the trading tips in gold . I'm new to trading and I got into the market when gold was at 1084 not really knowing it was a low of five years or so I asked the broker if I should buy gold he demanded I didn't because I didn't have much money now it's at 1160 I lost out on 1450 $ if I wouldn't have listen to him then he told me that USA was going to release data and raise interest and gold was going to tumble so when it hit 1127 I I bought into a sell position if I only would've read your tips I wouldn't have tried to chase my profit losses it ended the week at 1060 so as you can see I took a big loss instead of making the big gain I should've if I wouldn't have listened to a dummy . pleas help lol

Patrick Dugan link
18/2/2013 05:55:48 pm

If it's physical silver, hold. If it's SLV, sell, or at least sell some calls. I mean, it depends on your time horizons, silver will probably go up over the next several years so if you don't mind having dead money for another year, maybe you'll have a good buying opportunity ahead of you to "build a position".

Time horizons a major factor.

Reply
Coffeeclue
27/2/2013 07:42:53 pm

John Keynes once said, "In the long run we're all dead". You've already incurred the loss. The fact that you haven't sold out of your position means only that your money is locked up in a losing trade. If you expect the silver to go up soon, then don't sell. But you must have a really good reason to believe this. Otherwise sell and pursue another trade that will make you money.

Reply
MASTER
1/5/2013 04:47:42 pm

SELL

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Marco Giebels
5/9/2013 09:13:11 am

Study the market fluctuations over a long time, and study your conclusions, markets are quite cyclical over a long time. Bad becomes Good, Good becomes Bad, You just have to find out when to bull or bear.

Reply
Mike
30/1/2013 05:26:54 pm

Is there a reason why you trade in just gold? Why not diversify and trade on anything?

Reply
UKGTE Customer Service link
30/1/2013 08:59:40 pm

Hi Mike - see point 1. It's all about getting to know your market in detail. We have previously traded forex and equities, but we have found our success when we focussed on one thing and became experts in it.

Reply
Adeyemi Adisa link
7/2/2013 07:27:06 pm

Many thanks for this article. I am a newbie in financial trading and I hope to learn as I grow my portfolio.

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Milan
12/2/2013 04:42:32 pm

How to start

Reply
Kevin
22/2/2013 04:58:41 pm

"Statistics say that 95% of these traders lose over time"

Where is the this found?

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Kevin
22/2/2013 04:59:52 pm

Where is this** stat** found?

Reply
UKGTE
26/2/2013 02:48:34 am

Kevin

See these links;

http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trade%20040330.pdf

http://traderfeed.blogspot.co.uk/2008/01/do-individual-day-traders-make-money.html

Dennis Patrickson
3/3/2013 05:17:24 pm

Although I have plenty of money to invest, I need more info - contatc me at ikonik.images@gmail.com or 314-283-0097.

Reply
Dennis Patrickson
3/3/2013 05:18:09 pm

What is the min. investment?

Reply
UKGTE Customer Services link
3/3/2013 10:32:30 pm

Hi Dennis,

We don't take any money to invest on behalf of our subscribers. We are purely an information service.

Many thanks

UKGTE

Reply
Michel link
7/3/2013 05:32:46 pm

did your 1wt trade in october 2011 make / lost 35%?

Reply
UKGTE Customer Services link
7/3/2013 08:54:03 pm

Hi Michel,

Our first trade in October 2011 gained 35% - it was the first trade we shared with our customers since making the site live...a great start!

Reply
BABALOLA TAIWO link
1/4/2013 05:19:44 pm

i like this article

Reply
James
5/4/2013 06:30:04 pm

Am a Gold dealer and wants investors

Reply
James
5/4/2013 06:31:06 pm

Am a Gold dealer and want investors

Reply
suji
13/4/2013 07:27:56 pm

in my view Trading is easy but passion is key
simple technique : just wait for major support & resistance
just buy at your support and sell at your resistance.

it work 90 %

Reply
fw link
18/4/2013 08:29:55 pm

thanks info

Reply
Pete
18/4/2013 08:48:04 pm

Thanks for this article, which neatly sums up all the reasons I lost everything and some a few years back. I did all the things you have listed that a trader should not do and it led to my undoing. I learned the hard way. If and when I return to the market it will be with a different approach closely aligned with yours.

Reply
UKGTE link
29/4/2013 06:08:06 am

Thanks Pete - when you come back, why not subscribe to our services to help you trade gold successfully. Subscribe at http://www.goldtradingexperts.com/our-products.html

Reply
Trung
18/4/2013 09:02:50 pm

Thanks, I'm a beginner trader. I do research but fear to start for myself because of the risk. How can I manage them?

Reply
UKGTE link
29/4/2013 06:09:44 am

Hi Trung - if you are a beginner and are worried about how to manage your trades, subscribe to our service free for 2 weeks at http://www.goldtradingexperts.com/our-products.html

Reply
manu
28/4/2013 04:52:48 pm

Hi, I am new to online trading. Which platform can I use to trade. How much minimum investment is required?

Reply
UKGTE link
29/4/2013 06:12:08 am

Hi Manu - the platform and type of trading available are largely country specific. Where are you located? Read our "Beginners Guide to Trading Online" at http://www.goldtradingexperts.com/how-to-trade-online.html or subscribe to our service for a 2 week free trial and speak directly to our Pro's team for advice at http://www.goldtradingexperts.com/our-products.html

Reply
Umar
3/5/2013 04:48:16 pm

Hi, if i start trading gold full time, is it possible to make a living out of it and How, where to buy where to sell? Thank

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UKGTE link
11/5/2013 11:36:03 pm

Hi Umar - it is possible to make a living out of it, although you have to have a decent amount of capital to trade with so that you can draw-down a "salary" and keep trading. Some months are much better than others, so you need to be prepared for good times and bad.

We'd recommend that you start small if you are new to trading - follow an expert so that you don't fall into bad habits and see if it works out for you.

In terms of where to trade - it's quite country specific. We spreadbet in the UK using City Index - but many of our members are overseas and buy contracts or ETFs locally.

Reply
Drew H
4/6/2013 06:23:51 pm

7 tips would be very boring during dot.com era. Overtrade, overspend, over and over for more than 12 months shifted more wealth than anything else. It was fun and rewarding. Good learning experience too.

Reply
Hitesh
4/6/2013 10:53:55 pm

I am a newbie and do not have much knowledge about trading or the market. I am going through the links which you have mentioned in few of your comments for beginners.
what I would like to know here is, if I wish to trade in gold, how can I start? as in studying the gold market? understanding the trends of it? any advice?

Reply
UKGTE link
4/6/2013 11:25:38 pm

Hi Hitesh - thanks for your enquiry. Sign up for our no-obligation free trial and you get direct access to our Pro's team who will help you with every step of the way to becoming a successful trader.

Reply
Nikki
14/7/2013 10:07:33 am

Start at goldprice.org for spot prices for gold and silver, a quick list of the current trends, and graphs of the trends over various time periods. If you really want to get serious, do what the post was intended to inspire- check out their free trial. I've made most of my assets from crossing the gold market with real estate. I wouldn't recommend it now though. I bought gold when it was close to 900 and the housing bubble was at its fullest. Then it was the waiting game for almost a DECADE. I watched real estate like a hawk. As the economy dropped, gold got more expensive. Houses got cheaper and cheaper. Gold was at 1800, 1650 by the time I was ready to sell and had hand-picked the house I wanted. Properties had dropped from 5-700k+ to 2-300k for modest lots. I'm not sure I could pull it off so well again. It would sure take a lot more waiting and watching. Not everyone wants to put their money on hold that long. And what I "made" could be chump change for such a long wait when compared to other strategies but it was my goal and my plan and I'm glad I stuck to it. Know the market and know your priorities.

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StockGaming.com link
16/7/2013 09:00:29 am

The most important one is "remove emotion". However, this is also the most difficult one to do as humans are emotional animals.

Reply
AK
18/7/2013 04:42:13 pm

hi i just started on exchanging DOLLER to GBP and GBP to DOLLER
is it good for me to do this? i do this 1m at a time. i think this is the safest way for me. what you think.

Reply
castle leny link
26/8/2013 02:50:29 am

Financial management is the best strategic technique employed at making money yield the highest of interest yielding value for any amount of it spent. To Know your money management personality. If you’re a "Frugal Family Financier," you try to do everything as cheaply as possible!!

Reply
Drew Hardle
27/8/2013 03:05:37 pm

Good to hear that managed funds have only exceeded the overall index by the average yield of top stocks. I don'tknow why they get the tick of approval though.

Reply
International currency derivatives link
25/11/2013 01:43:21 am

This is the perfect blog for anyone who wants to know about financial trading. The article is nice and its pleasant to read. I have known very important things over here. I admire the valuable advice you make available in your expertly written content.

Reply
MANIMUTHU. S link
15/12/2013 08:27:23 pm

Quite useful.

Reply
Sudhir Kumar Khullar
18/12/2013 10:25:39 pm

Interesting, and Logical suggestion, well described.

Reply
Commodity Tips link
14/1/2014 01:14:59 am

With havin so substantially written content material do you ever run into any problems of plagorism or copyright violation? My webpage features a lot of exclusive content material I’ve either written myself or outsourced but it seems lots of it truly is popping it up all more than the web without my agreement. Do you understand any solutions to help lower content from becoming ripped off? I’d genuinely appreciate it.

Reply
UKGTE link
19/1/2014 12:05:56 am

Hi Commodity Tips. Sorry, but don't have any solutions to this. Our subscription services are protected by a pay-wall so users have to sign in to access them - other than that there is no protection of our copy on the website and if people want to use it then it's very difficult to prevent.

Maybe you should take it as a compliment that others want to re-use your material.

Reply
Stock Tips link
28/6/2016 10:00:09 am



Excellent and informative tips.I like your post and it really very helpful for all the people on web.thanks for sharing the post

Reply
Mcx free tips link
2/1/2020 09:47:27 am

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<a href="https://www.aurumservice.com/'> mcx free tips</a>"

Reply
George Papazov link
18/2/2021 10:10:12 am

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Reply



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UK Gold Trading Experts (UKGTE) is a trading name of Drupac Limited, a company registered in England and Wales (company number 09167819) whose registered office is 1 St. Paul's Square, Birmingham, B3 1QU.