Do you know trading silver is one of the easiest tasks in the investment business? The novice traders always struggle with precious metal trading and they eventually quit their trading careers. On the contrary, skilled traders easily make consistent profits by trading the silver market. To become good at silver trading, you don’t have to overcome major challenges. By following some basic rules, you should be able to make a decent profit.
As a new trader, you might be thinking that there is no way you will become a professional silver trader within a year. Take your time and read this article thoroughly as we are going to give you some effective guidelines which will allow you to trade the silver market like a pro trader.
Learn to Identify the Major Trend
The majority of the rookie traders fail to make money in precious metal trading due to a lack of knowledge. They don’t even know the proper way to find the major trend in the market. If you want to become good at trading, you must learn to deal with the major trend in a structured way. Use the daily or the weekly time frame to draw the major trend line in the market. Once you become good at analyzing the trend line in the higher time frame, you can easily plot the potential trading zone. Always remember, you can’t make any real profit unless you place your trade at the major support or resistance level.
It might take a while to learn the trend identification process. In the learning stage, you should be using the demo trading account and the simple trend line tools. Try to connect a minimum of three key swings while drawing the major trend line or else you will not get the actual support or resistance level.
Use the Leverage Effectively
Being a new trader, you need to know more about your trading environment. Look at this site and learn about the optimized leverage trading account. You should never take any trades in the silver market with the help of a high leverage trading account. Though it can allow you to trade with big lots, it will also increase the risk factor. Let’s say, you have executed long trades in the silver market with a big volume. If the trade goes wrong, you are going to lose a big portion of your trading capital. So, keep the leverage factor low as it will not allow you to trade with an insane lot.
Managing your risk exposure is not about taking 2% risk in each trade. You need to consider the environmental risk factors. That’s why elite traders never encourage rookie traders to trade with high leverage trading account.
Trade with Price Action Confirmation
Professional traders always trade with price action confirmation signals. They use the different candlestick patterns in the market and execute their trades in a structured way. The novice traders might be thinking that learning about the candlestick patterns is a very tough task. In reality, it is one of the easiest tasks in the retail trading profession. Instead of learning about the hundreds of patterns, try to know the functions of the most reliable candlestick. Once you get used to the most reliable candlestick patterns, you should be able to earn more money with a great level of comfort.
As a price action trader, you should also select your trading time frame carefully. If you chose to analyze the lower time frame candlestick patterns, you will never get the accurate signal. It would be wise to stick to the higher time frame as it will give you a better signal.
Trade with Discipline
Successful traders are very cautious about their steps. They never take aggressive steps to earn more. To them, discipline is the core factor that determines their success. Create your own rules and write them down on a piece of paper. Follow it precisely no matter how good you are trading. Once you become good at managing your actions, you will no longer struggle in the silver trading profession.