A Winning Combination for Traders: Are you tired of Loss Making Trades?

Taking home winning trades isn’t easy! A day trader usually loses hope when he is trapped in a trading rut, and all his strategies are failing badly. Seriously, making money isn’t easy in any sort of market conditions, so stop blaming the economy, and for that matter don’t criticize your broker for charging hefty commissions. I used to have losing streaks quite often, and at one point early in my trading career I gave up completely. Well, now after six years I am glad that it was a temporary phase, but everybody isn’t that lucky. Most traders never come back after making hefty losses at a stretch.

I can’t share a winning strategy here for a simple reason that I am not aware of one. But, I will share my experience through a few tips that can possibly save you from experiencing the worst trading phases. Save them for future reference or paste them on your trading desk, these will surely be your savior in dark days when your trading account is bleeding with frequent losses.

Stay High on Cash when using Leverage

Leverage is the real culprit, but a trader cannot do without it especially when starting a trading career with limited money. Brokers can entice you by offering very high leverage on your cash, but only a wise man knows how to use that without exposing to too much risk. So, whenever you place your trades next just ensure that you do not leverage too deep with your available cash. Don’t let greed trap you to trade aggressively, maintaining cash limits will allow you to minimize losses on a bad trade. You can easily do this by cutting down your average position size on daily longs and shorts.

Stop Being a DIY Tuff Guy: Seek Professional Help

So, you are the tuff guy who doesn’t need help in picking right trades? A pair of extra eyes and professional advice shouldn’t do you any harm. Get practical, trading isn’t about proving yourself, you are in it for making money. So, it does make sense to take help from professionals who are good at picking winning trades and better understand the market sentiment. I know that most small traders cannot afford the cost of broker assisted trades, and one probably shouldn’t waste so much money for day trading. I find subscriptions of some popular trading services really helpful, and combining these with a discount brokerage account for cheap trading is a magical combination. What I like the most about these subscriptions is that you get access to combined views and strategies of technical as-well as fundamental analysts. And, what’s really worth a mention is that they are really cheap when compared to services of dedicated investment advisers. Personally, I use these subscription services for staying on top of market trends.

  • WSJ
  • Zacks
  • Morningstar
  • Mint 

Switch your Broker: Don’t think twice on this one

If you are currently trading with a full service broker, you are probably giving out a major share of profit as commissions, and I don’t even want to talk about what happens to loss making trades. Such brokers are good for long term investors as they won’t feel the brunt of hefty commissions for reasonably good advice.

At a second thought, you should have been riding on profits if your broker and his advice was any good. Don’t you get the point that they just want you to overtrade so that they earn their commissions? This is not the case with subscription services, they just try to stay informative and guide you in best possible ways, as only then you will continue with their services. Switching over to a discount broker and relying on subscription services is surely a winning combination and it can work for you too.

I recommend that you read through some of these brokerage reviews and find a suitable broker for your trading needs. If you need any assistance, feel free to post your queries in the comments section below.

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