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Highlights
- Bringing about an improvement in their stock market trading skills would be the foremost goal for many investors in 2022.
- Investors would seek to devise strategies that could ensure steady returns at controlled risk levels.
- December’s last week would be the ideal week to wipe the slate clean and carry out a post-analysis of your past trades.
For most investors, improving their stock market trading skills would be the foremost goal in the year 2022. While it is a tough game to time the market, investors should certainly learn to devise strategies that could ensure steady returns at controlled risk levels.
So, the last week of December would be the ideal week to wipe the slate clean and carry out a post-analysis of your trades in the past to find out where you stand and need further improvement.
Here are six tips to improve your trading skills in the new year:
Image Source: © Wutzkoh | Megapixl.com
Seek help
It is always advisable to have someone in your life who keep a tab on your trades. It helps in becoming accountable for your trades. You can try for a Trading Referee – a person who will keep you in the discipline in terms of trading and ensure your lapses don’t cost you dearly
Such a person could be a mentor, coach, or a family member (not necessarily a trader). He would also help you to keep updated on your performance. You may also try a chat room, forum, or regular meeting with people you respect.
Don’t blindly go by others’ opinions
Discussing trading strategies with others is fine, but you should avoid opinions of others when it comes to specific trades. You must never deviate from the trading plan that you have built after detailed research and discussion. There is no one-size-fits-all approach that works in the trading world. Don’t let others ruin your trades.
Practice hard
There is no substitute to hard work and the same applies to the trading world as well. There are times when a particular trading strategy appears simple on the surface but become hard to implement in live market conditions. So, trading is very different from what we see in textbook examples. To get proficient at implementing a method, practice it as much as possible. You can also trade it in a demo account until you consistently see profit from it.
Create a new watchlist for stocks
The other important tip is to look for creating a new watchlist of stocks. With a new year comes new opportunities in new stocks and all should work smartly to tap them. Remove underperformers from your tracking list and include the ones with high potential.
Monitor every trade
Experts always advise devising a mechanism that helps to monitor and review every trade that one makes. Taking screenshots of your trades with entries, stop-loss levels, targets, and other things can help you to easily review your trades at a later stage. A screenshot can help immensely since it shows exactly what you did in those exact market conditions.
Dollar-cost averaging
Even as dollar-cost averaging is employed by beginners, the strategy is generally less used by experienced investors. However, it is one wise strategy for long-term investors and can be tried more actively in the new year. Shares can be bought regardless of stock price and end up buying shares at a low price when the market is trading on a bearish note.
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