Tips for Becoming a Successful Active Trader


Becoming a successful active trader requires dedication, skills, discipline, and love for trading. Active traders can be scalpers, swing traders, or day traders who try to make profits from short-term price changes. Trading is risky, but you can make a decent income from it with the proper knowledge. In this article, you’ll find tips that will help you become a successful active trader.

1. Research


For any business you intend to venture into, gaining the required knowledge is vital if you want to succeed. You can search the web for information that will help you get started as an active trader. In addition, the markets change every day, and you may want to keep yourself updated about the latest trends in the industry. Consider consulting experienced financial advisers such as for the best trading practices.

2. Create a trading plan

Creating and sticking to a trading plan will help you make intelligent trading decisions. It also eases trading, installs better trading decisions, and leaves room for improvement because you learn as you go. A good trading strategy should highlight your trading motivation, how much time you need to trade, your goals, the amount of capital you need to start, your record-keeping steps, and the reward-risk ratio. It also helps you avoid trading mistakes that most beginners make.

3. Set aside your trading capital and protect it


Set aside a reasonable amount of money for your investment. It is advisable not to put all your eggs in one basket, as you risk losing it all. Investing only what you can stand to lose is your best choice It’s okay to miss out on winning opportunities and wait for better ones instead of losing capital that will be hard for you to raise.

4. Be disciplined and patient

Discipline and patience are every successful active trader’s mantra; you need to be patient and disciplined with each passing trade activity. It would help if you have the patience to wait for opportunities when they arise, and the discipline to trade immediately when an opportunity presents itself. Discipline and patience will help you to avoid trading with emotions which can be your downfall.

5. Build your independence


When starting in the trading business, you may consider reading articles from the web or reading every trading book you can find. Ultimately, you have to begin trading independently without relying too much on any given source. This helps you boost your confidence and shape your trading journey.

Your confidence will help you curve a trading journey for yourself and find out what works for you. If you allow yourself to learn from your mistakes, you become more confident and daring to keep trying and eventually become a successful trader.

6. Have a stop-loss on every trade

A stop-loss order helps you limit your risk of a trade by exiting when the order reaches a set amount, and it should be part of your trading plan. It protects you from losing all your investment in one go. For example, if you buy a stock at $30 and set the stop-loss at $25, the order will execute when it hits $25, and if the price never gets to $25, then the stop-loss will never run. A stop-loss is a great and necessary strategy that prevents you from incurring more losses.

7. Don’t be guided by greed


When it comes to trading, those who want it all end up losing it all. Trading is a game of fluctuating numbers. The tide might be in your favor in one second and against you in the next. This is why it is necessary to trade with caution and know when to stop.

Don’t let huge winnings deceive you into believing that it’s your lucky day because you could be both a millionaire and a pauper in less than five minutes. Learn to leave with your head held high than to fall flat on your face trying to win more money.

8. Make use of technology

Continuous technological advancements have significantly impacted the world of finance and trading. You no longer have to rely on stockbrokers as there are several trade monitoring software that can help you keep an eye on the market fluctuations, and notify you when a trading opportunity arises. This gives you a competitive advantage against your fellow traders who are not so tech-savvy.

Trading technology is beneficial in other ways such as reducing emotional trading, improving order entry speed, diversifying trade, preserving a trader’s discipline, and allowing for backtesting. This is all achievable since the system is automated.

9. Evaluate your progress


The trading graph isn’t linear one, which is why it’s essential to take a pause and evaluate your journey. Look at your losses and successes. Find out what led you to lose and learn from it. Examine your accomplishments and see what right decisions you made. Focus on them and improve. This is how you perfect your craft.

10. Set goals

Your goals should fuel your trading motivation. They help you become more focused as you’re working towards a set target. Plans help reevaluate your decisions. When you’re all in on trading and everything is going smoothly, readjust your goals and aim higher. This will motivate your focus and determination to succeed as an active trader.

11. Keep up with trends


As technology continues to evolve, so does the finance and trading industry. Whether you’re an experienced or a beginner trader, keeping yourself up to date on matters technology will help you take advantage of each new trend and reap maximum benefits out of it. You can also familiarize yourself with every valuable trading content you find to enrich your knowledge, boosting your confidence to keep stretching your limits.


Just like any other business, trading is fun and unique when you know what you’re doing. However, before you plunge into it, understand that not everyone succeeds in active trading, and failing once doesn’t make you a loser. Embracing the tips above will help increase your chances of becoming a successful active trader.


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