As the financial markets continue to change, successful trading requires the combination of a disciplined strategy, along with risk management and constant learning.
Table of Contents
Essential knowledge about trading for 2025
The world of trading requires continuous adjustment and constant learning to stay ahead of the curve.
Understanding the fundamentals of market along with technical analysis, as well as the principles of risk management is essential to the success of any trader.
Modern traders must leverage the latest trading platforms and analytics and maintain a controlled emotional state.
A well-written, clearly defined trading plan should be the basis for every decision, ensuring that you to avoid sudden moves that are based on market sentiment.
Managing risk effectively
Making sure you are properly managing risk using tools such as stop-loss order (at any time!) is vital to long-term success with trading.
The forex market as well as other assets need careful positioning and portfolio diversification.
Do not take risks that exceed what you are able to afford to lose and steer clear of the temptation to leverage too much. The risk of 2-3% of the total capital invested in trading per trade is acceptable, however the risk of a 10% or greater per trade will result in a margin call or worse, you will not will be able to carry on your trading adventure.
The reason is that during a trader’s “trading” experience, it is almost a mathematical certainty that at a certain point they will have five or more loser in the same row. If a trader takes on 10 percent for each trade, they’ll lose five times as much, i.e. 50 percent of their trading capital during the negative time. They’d then have to turn a profit of 100 in order to return to their initial position.
A demo account will allow you to test strategies without taking on real capital.
Common mistakes in trading to avoid
Losses and trading too much are among the most destructive practices for traders to break.
Many traders get caught in the trap disregarding their trading plan when emotions are high.
An online trading system, and in particular the trading phone application should be used to conduct analysis and not for emotional decisions.
Research that is thorough and a fundamental or technical analysis should be the basis for trading and not the hype of social media or market rumors.
Developing your trading strategy
Begin by determining precise entries and outs for each trade, using either fundamental or technical analysis. Ensure that they are backed by a positive expectation. This implies that the entry and exit points form part of a trading plan that is profitable over time. One method of achieving this is to ensure that average winners have more than average losers. Or that every potential loss results in a lower loss than the potential gain.
IG’s weekly “Trade of the Week’ report illustrates this. Even even though IG’s technical and market analysts were correct nearly half their time, they managed to earn an estimated 31.45 percent potential gain in 2024, while only putting at risk 2% of money per transaction. They achieved this due to the fact that they were disciplined in their stop loss constantly and, on average, made 1.6 times more profits than losses.
Trade of the Week Per trade P&L graph
The concept behind “Trade of the week’ is to allow the IG’s UK market analyst Chris Beauchamp and Axel Rudolph to demonstrate potential and current traders how to put in an order, and decide the right place to place limit and stop orders, while also incorporating solid risk management and money management strategies.
It is important to note that all setups for 2024 and ideas for trades in the weekly “Trade of the week’ videos were just a figment of imagination and were not executed with actual money by IG’s market analysts.
Trade ideas are recorded each Monday morning, and is available in the primary IG UK website as an article under the section ‘News and Trading Ideas”, and at MyIG in both the News as well as ‘Videos sections, and on the IG the UK’s YouTube channel.
With the help of trading signals as well as other tools to aid your decision-making process, keeping an account of your trading results and gain knowledge from both failed and successful trades, and being focused at all times and focusing on your own goals, you will greatly increase your chances of becoming a successful trader.
As trader, you need to immediately take your lessons from mistakes and try to avoid repeating your mistakes!
It is also recommended to consider trading different timeframes and asset classes, and analyze the market’s conditions in designing your trades to spread risk.
