Trading has seen significant growth worldwide over recent years, driven by regulatory shifts and increased adoption of mobile solutions. In India alone, active derivatives traders have risen six-fold between 2019 and 2023.However, many emerging traders find themselves struggling to achieve
consistent outcomes. In this article, the experts at Octa, a global broker since 2011, give some first-hand tips on using analytics and financial knowledge to improve trading results.
When new traders start their journey in the financial markets, they often get frustrated with the seemingly chaotic price fluctuations and the number of factors affecting decision-making. However, with time, the most disciplined and persistent learn the ropes and start making a profit.
Below are some time-tested ways to achieve better trading results overtime.
Continuous learning as a key to success
The ability to make rational and informed decisions is paramount to achieving consistent trading outcomes. Successful traders often emphasise the importance of systematic, logical, and data-driven thinking instead of rash, emotional choices driven by the fear of missing out and greed. And this is where education comes into play.
With the wide adoption of digital trading platforms, trading-related education has never been more accessible. For example, global brokers like Octa promote strategic thinking and a long-term, goal-oriented approach by offering various educational materials and tools, including:
- Webinars
- YouTube channel with more than 1 million subscribers
- Analytical articles
- Demo accounts to practice trading risk-free.
Education in trading: getting an edge
By acquiring financial knowledge, traders improve their decision-making and make their strategies more effective. It is worth noting that even a limited amount of relevant information can make a difference and bring about better trading outcomes. However, seasoned traders never stop learning— the markets are constantly changing, and incrementally streamlining your strategies will give you a significant edge. Expanding your trading knowledge and applying market analysis will definitely help
you mitigate or avoid many risks.
Among other things, education in trading allows you to put your wins and losses in perspective and perceive your intermediate results as a part of the bigger picture. This way, you can focus on your long-term goals and not let yourself be overwhelmed by emotions.
Octa helps traders make well-informed decisions by maintaining complete transparency of its trading conditions and transactions and reflecting all the necessary information in its Terms and Conditions. The broker allows traders to mitigate risks by offering clear, precise guidelines regarding the available risk management tools and the cautious use of leverage.
Fundamental analysis
To predict market behaviour and anticipate meaningful changes, traders use two types of analysis: fundamental and technical. Understanding both types of analysis is not obligatory, but it can drastically boost your ability to navigate the practical aspects of risk management in trading.
Fundamental analysis predicts an asset’s value by assessing various political, economic, and regulatory factors. Traders who engage in fundamental analysis follow crucial global news, such as U.S. presidential elections, and factor in those that can trigger promising trends in target asset prices.
Technical analysis
While fundamental analysis deals with events, technical analysis is all about numerical data. Traders apply technical analysis to forecast market behaviour based on historical data patterns. They use charts and statistical indicators to single out relevant trends and interpret this information to predict future price movements.
There are many variables and pattern types in technical analysis, each with specific use cases. For example, resistance levels allow you to predict downward price movements and profit by opening short positions. In this case, placing a stop-loss order will be a recommended risk management tool to safeguard you against the asset price breaking through the resistance level.
Conclusion
In trading, as in any other knowledge-based activity, continuous learning and analytical thinking are instrumental in managing risks and achieving desirable outcomes. By using fundamental and technical analysis, acquiring a firm grip on trading fundamentals, and constantly updating their knowledge, traders can significantly reduce their losses and take a step towards their long-term financial goals.
