Trading Rules

Trading Rules
Proper trading rules explained

As you embark on your online trading journey, knowing how to trade effectively goes beyond just being able to open and close positions. Trading basics start with understanding the fundamentals such as trading rules, how to choose the right broker, how to plan your trading and more. While your ultimate destination or goal is to make a profit, it’s how you plan to get there and the decisions you make along the way that will determine your trading success.

One of the first decisions a trader will need to make is choosing the right brokerage partner. A broker is your gateway to the markets and essentially your partner. As such, you need to ensure that you choose a partner that is as invested in your success, especially if you are new to trading and still learning how to trade. A reliable and reputable broker will not only provide the perfect trading environment but will also make available handy trading tools and resources that will enhance your trading activities.

With access to the markets, you must now create a trading plan, but before you begin, it is essential to understand the trading rules to create an effective plan. A trading plan details how you will execute your trading or basically, how you will conduct your trading techniques. You will have to choose your trading style (short or long term), your trading strategies (how to enter and exit trades as well as your preferred setups), and also your risk management plan (risk/reward ratio and stake amounts).

A good trading strategy may generate profits for you, but it is a good risk management plan that will allow you to keep your profits and stay in the game for the long run. Having a trading plan is useless if you cannot stick to it. You should commit to rock-solid discipline at all times, and never allow subjective factors, such as emotions, to interfere with objective trading activities.

This is achieved by developing the proper trading mindset, based on the knowledge of trading psychology and its key elements. Online trading is an exciting endeavour, and it is possible to achieve consistent profitability by ensuring you know how to trade efficiently and have mastered the trading basics before progressing to more advanced trading techniques and strategies. Take time to browse through the tips that will set you up for potentially more successful online trading.

What is a trading plan?

As not every trader is the same and there is no perfect trading plan, there are universal rules and elements to consider when you are building your specific trading plan to suite your trading style. Want to know what should be included in your trading plan?

What is trading budget

How much money do you need to start trading? What are the risks of being undercapitalized and how to avoid them? What’s the proper leverage based on your available balance? How to avoid a margin call and properly size your positions? Read our guide to find answers to these questions.

What are Trading Styles

Are you a day trader, a swing trader or a scalper? Explore your trading style. In this section we take a look at the various trading styles that are adopted by traders in today’s markets. Discover which is best suited to you, your risk tolerance and your knowledge of the trading market.

What is trading psychology

Fear, greed, hope and regret are normal human emotions, but they can seriously impact the performance of a trader. Read about the psychological aspects of trading, learn to identify and manage the emotions that can influence your decisions and develop a winning trader’s mindset.

What Types of Traders Are There?

The multifaceted world of financial markets offers numerous opportunities to make money by buying or selling financial assets online. Different traders use diverse strategies to pick out lucrative opportunities in the market. It is important to understand the various trading styles to determine which strategy is best suited for your trading goals.

What is paper trading?

Paper trading also known as demo account trading allows traders new to the Forex market and CFDs the ability to trade for free on a practice account before trading for real. By building up skills and acquiring trading confidence 'paper trading', plays an invaluable role in a trader's education.

What are Forex Signals?

Forex signals came about as a natural innovation of the financial industry. They basically solve the most daunting activity any trader has to perform – to identify the right trading opportunities at the right time.

How to read a forex chart?

Learn about the different types of price charts - line, bar and candlesticks charts to better understand the information represented in this form. Assess market conditions such as buying/selling pressure, highs and lows of the price during the given time frame directly by analysing the graphs. Get to know important graphical analysis patterns and their meaning to become a better trader.

What is a Trend

In the financial markets, there is an expression: ‘The trend is your friend’; and while this phrase might make logical sense, in practice it is as opaque as it can get. But what is a trend and how do we define it as well as trade with it?

Trading platforms comparison

AvaTrade provides its clients with a range of trading platforms, proprietary and third party. Read the review and features of the available trading platforms in order to choose the best forex trading platform for your needs. Compare the industry standard Metatrader 4 vs. other platforms available at AvaTrade. Learn the features of other manual and automated trading solutions available to our clients, including ZuluTrade, Duplitrade etc.

Forex Taxation

Understanding your tax responsibility is very important if you plan to engage in forex trading. Furthermore, keeping track of your FX taxes can also help you to account for your forex trading activity, which isn’t a bad thing at all.

How to Build a Forex Trading Model

A trading forex model is a clearly defined, step-by-step rule-based structure for governing trading activities. In this article, we introduce the basic concept of trading models, explain their benefits, and provide instructions on how to build your own forex trading model.