Financial trading is an investment like any other, but you have to take calculated risks. Every price movement speculation on a particular asset or currency should be based on accurate data. The most successful traders have an intelligent financial plan that resonates with their goals.
Using the resources, videos and classes of Quantrix Capital will help you create a well-thought out financial plan. With a smart financial plan, you will know which markets to trade in, the ideal time to take profits, when to cut losses, and how to identify unexploited opportunities.
Simply put, a financial plan is a strategy used to make trading and financial decisions. It determines your trading activity by enabling you to make informed decisions on what, when, and how much money to commit to a particular trade.
Like a budget, a financial plan should be personal. Yes, you can use someone else's plan for inspiration when creating yours. However, keep in mind that the other trader's perception of risk and available capital could differ from your own. Quantrix Capital provides access to many other expert traders and investors, which will help you set examples from and set up your own financial plan.
Unknown to most people, especially to new traders, there is a difference between a financial plan and a trading strategy. The trading strategy determines how much funds you commit when entering trading and when to exit a trade. For example, you can develop a strategy to purchase Bitcoin or any other cryptocurrency when its value hits $4,000 and sell when it hits $10,000.
As explained in the Quantrix Capital classes and videos, a financial plan will enable you to make wise trading decisions. It will also define the parameters for your ideal trade. Concisely, it will prevent you from making decisions based on emotions and in the heat of the moment. A primary reason for many traders to make losses is because they make sporadic decisions.
Below is an overview of the reasons why you should have a financial plan.
Quantrix Capital lessons, videos and resources will teach you how to follow a few straightforward methodologies when creating the ideal trading plan.
Let us now briefly review each of these steps.
What is your motivation to trade? Finding out what motivates you to take part in financial trading is the first step to successful trading. Ask yourself why you should become a trader and write down a list of goals that you hope to achieve from this craft.
Look at your current daily or weekly schedule to know the amount of time that you can commit to trading activities. Can you trade after work, at work, late at night before retiring to bed, or early morning before leaving for your day job?
The experts and teachers at Quantrix Capital will teach you how to allocate enough time to acquire all the information you need to trade, analyze markets, and put your strategies into action. More importantly, compare and contrast the results each approach generates to know which one suits you best.
Firstly, a trading goal should not be a mere statement that keeps you on your toes. The ideal trading goal should be SMART, that is:
For example, I want to increase the value of my trading portfolio by 20% in the next six months. This kind of goal is smart because you can use it to measure your level of success, it is attainable, relevant to financial trading, and there is a period.
What type of financial trader are you? As mentioned earlier, every trader has a different approach and perspective on markets. Your trading style should resonate with your attitude towards risk, personality, and the funds you can afford to spend on trading without getting into financial turmoil.
As the Quantrix Capital classes will teach you, there are four primary trading styles, namely:
What is the level of risk you take on with the individual trade and the whole trading strategy? Knowing the amount of risk that you can comfortably handle will help determine your risk limit. The market prices are dynamic, and even financial instruments perceived as safe have a degree of risk.
Most new traders prefer keeping the risks low as they test the waters and learn the ropes of financial trading. They hope the experience of handling low risk will encourage them to take on informed high risks and make more significant profits in the future. Visit Quantrix Capital website to learn more about how to set up your risk-reward ratios.
Such a strategy can help cushion you from making huge losses at the start of your trading journey. Remember, trading platforms allow users to manage risks with stops.
The teachers and investment experts at Quantrix Capital help you take a closer look at your budget to determine the amount of money you can commit to trading. The rule of thumb is never risking more than you can afford to lose. Note that every trade has a risk, and you may end up losing the whole amount if things go south.
No need to fret if you currently do not have the minimum capital required to start trading. Use this time to learn, build a strategy and hone your skills by trading on a demo account.
The knowledge you have about a particular trade and the specific details of your financial plan will directly impact your success rate as a trader. It is wise to evaluate your expertise and knowledge on the various asset markets and classes regularly. Put for yourself a purpose to learn anything and everything about the market to make informed decisions.
Studying the trading industry will help you to know when a particular market opens and closes. You will also know the market volatility and be able to speculate price movements. Eventually, you will calculate how much you will gain or lose per point of movement in the traded asset price.
Feel free to leverage a different market if the factors above do not match your personal preferences.
Consider joining Quantrix Capital to get valuable information about the various markets and asset classes.
A trading diary will support your financial trading plan and help you stay on course. Document all your trades in this diary and review the results regularly to know which strategy is working and which one should be ditched.
The technical details such as entry and exit points do not have to be included in the diary. However, some traders document the emotions and reasons why they decide to place a particular trade. It is also a good idea to take notes and write down why you deviated from the plan and the outcome. Concisely, the more details you write in the diary, the better!
Creating an ideal financial plan is the secret recipe for success as a trader. Use all the knowledge, classes, tools, and videos tools and resources available at Quantrix Capital to continuously evaluate the feasibility of your plan to know if there are areas that need to be tweaked. Good luck!