While it is easy to start trading on a whim, it can be difficult to successfully build a flourishing business. The stock market and financial markets are a complex world, one requires real skill to navigate successfully.
In this article, we will share some of the reasons why your trades are not producing profits for you. If you are looking for ways to improve your profits, you have come to the right place!
Consistency is essential to profitable trading
If you are trading but failing to generate enough profits, the first question you need to ask yourself is what am I doing wrong?
Answering this question is one of the only ways to successfully correct your mistakes. And the number one mistake most traders make is not being able to tell what they are doing wrong because they do not have a single clue.
If your first instinct is to tell yourself that perhaps it is because the markets have changed, or maybe you are not trading in the most suitable assets for you, I will stop you right there.
In trading, you first thing you always have to do is question your strategies. And to help with that, it is a good idea to keep track of them.
With this in mind, we recommend that you keep a trading journal. We told you about trading journals in a previous article. They keep a complete track of your previous trades, with details such as money coming in and money out, how long you held the position open, details of your analysis, why you thought it was a good trade.
Having all of this information to hand will allow you to assess your own thoughts with the benefit of hindsight. Something that struck you as a good idea at the time may not have been in the end.
Retrace your steps, take the time to assess your previous trades, and take the time to alter your loss-making strategies and improve your financial market knowledge. This is what will enable you to generate more profits and make your business really profitable.
Here, if you do not have the patience to fill everything in manually, FixyTrade has a way of taking care of it for you. By synchronizing your accounts to the FixyTrade platform, a trading journal will be created for you automatically as your trades progress.
You can access the details of your previous trades in a few clicks and see what that made you money and what lost you money. But it doesn’t stop there, FixyTrade’s trading journal comes with extensive statistical tools that will allow you to analyse your strategies.
What’s more, integrating your accounts is quick and easy!
Trading in real money: here’s why you aren’t improving!
A common mistake made by traders is only using real-money trades. It has often been said that practice makes perfect, and that certainly applies here.
There is no shortcut to improving, you have to practice over and over again, and for that, you have to use strategy simulators.
You do not have to trade using your money in order to practice, and you don’t have to bet a real sum of money in order to think and act like it is real. And this is one of the steps you need to take in order to generate more profit.
Practice again and again, make dozens of trades, only be satisfied when your win/loss ratio goes up. This is an essential part of your training! FixyTrade offers you a strategy simulator integrated into its platform, which enables you to test each one of your plans and see their impact on the past prices of financial assets.
With the FixyTrade strategy simulator, you can practice without constraints or limits.
No more excuses, it’s time for you to trade on paper!
Trading on paper to become a disciplined trader
One of the problems traders face when trading hypothetically is failing to take it seriously, and not investing as much energy in it as a real trade, because no money is involved and there is no risk factor or time pressure.
This problem is real, and we completely understand why this happens, which is why the editors have a solution to offer you. In order to recreate the real conditions of a trade, you should create your own constraints, your own stakes for if you generate losses, as well as your own reward if, conversely, you generate profits.
For example, if you are not naturally athletic, force yourself to do push-ups when you make loss-making trades, run 5 km if you end your month with a negative balance, create commitments to yourself that will make you want to give your best when you are thinking about your trading strategies, despite the fact that they are fictitious.
If you do not think you can stick to your own commitments, you can even ask someone to hold you to them.
What we have just described to you is all about goal management.
In order to successfully make money on the financial market, you have to be able to stick to your goals. FixyTrade is here to help you get there. With its goal-tracking functionality, the FixyTrade platform provides a global overview of the progress of each of your goals and the impact of each of your actions on them.
This holistic view will enable you to identify which actions are more important than others, and therefore how you should adjust your thinking and actions in order to achieve your goals.
You have to see this feature as a vision board for trading, a constant reminder of what you are, what you want to become and the distance between the two.
Improving your stats is the path to success
Recognizing your weaknesses is the first step. Knowing how to improve is another. There is a simple mathematical rule to follow in order to improve your stats. Find out more!
To identify whether it would be useful to trade in a financial asset, you have to estimate the risks taken at the point of the trade. But the mistake commonly made is estimating the hypothetical risks and rewards independently.
The way to generate profits is to estimate the two and compare them to each other. This is referred to as the profit/loss ratio.
The principle is simple, you have to do everything you can to keep the ratio between risk and reward higher than 2. What this means is that when you calculate what you could lose versus what you could gain, the rewards are large enough to cover double the losses.
FixyTrade allows you to access performance graphs so that you can compare these different ratios and identify your profit zone.
You can also use the advanced statistical indicators offered by the platform to successfully visualize the different scenarios that could result from trading in a financial asset.