Confused about finding additional income to keep your finances healthy during the 2022 Corona pandemic? One option is to try stock trading or forex trading. Trading is not the same as investing, as online trading typically seeks quick profits, or short-term gains, by seizing the right moments. Various strategies can be employed, such as day trading, scalping, or swing trading.
In Indonesia, the success story of Mr. Bekti Sutikna can be an inspiration. With only IDR 15 million, Mr. Bekti managed to earn up to IDR 14 billion using a scalping strategy within six months by trading daily with the best brokers that offer low spreads and trading platforms equipped with comprehensive analysis tools.
To get started, you might consider following these simple tips:
⦁ Learn. Yes, learn and keep learning trading. Most beginner forex and stock traders do not spend time learning what drives specific currencies or stocks, especially learning fundamental analysis.
⦁ Avoid Overtrading.
Trading too aggressively, repeatedly making transactions with very short Stop-Loss and Take-Profit targets, will only benefit the broker. Whether you profit or lose, you still have to pay the commission to the broker.
So, try not to be too greedy in trading; you must control yourself, know when to stop, and when to accelerate your trading.
⦁ Avoid Over-Leveraging.
Leverage can be said to be a double-edged sword. What does leverage mean? It means a small capital has a 100, 200, or even 2000 times greater impact.
Usually, trading accounts that use too much leverage can result in losses exceeding the capital placed in the account. Don’t let yourself get into debt with the broker in your attempt to earn additional income.
⦁ Do Not Rely on Others.
A true trader is one who succeeds due to their own efforts and abilities. Make your own decisions and do not rely on others’ trading signals. Learning from or seeking trading advice from more experienced traders is good, but it is even better if all decisions rest with you.
For beginner traders, it might be acceptable to use trading signals from others for learning purposes, but study carefully the reasons behind those buy or sell signals to get better at trading.
⦁ Consider Price Action, Technical, and Fundamental Factors.
To predict whether a currency pair or stock will rise or fall, it’s best not to focus on just one or two factors. A simple way to trade forex, for example, is by observing basic price action patterns and technical indicators, and then considering fundamental factors. Once these three align, you can make a transaction.
⦁ Preparation Before Trading.
This step is as simple as setting up risk management rules, such as trading policies and specific rules, like: How much are you willing to lose or gain? 30 points? 50 points? Or 70 points per market entry? Or 30%? 50%? 70% of your initial capital?
Set these loss limits before trading because once you start, you might become anxious and get caught up in psychological factors. If you have specific trading policies and rules, then when trading, you just need to apply discipline to follow those rules.
⦁ Follow Market Trends.
There is a big difference between buying at a low price when prices are falling and buying at a cheap price. Low prices will quickly become high prices when you trade against the market trend.
If you trade following the market trend, even if you buy at what is considered a high price, you can eventually make a profit.
⦁ Discipline in Cutting Losses.
If you are in a trade and the outcome is not good, you need to cut your losses with discipline and not let it drag on, eroding your capital.
Conversely, if your trade is on the right track and starts to make a small profit, don’t be in a rush to take profit just because you are tired of waiting or want to relieve the stress of watching fluctuating prices.
Train your patience to achieve optimal profits. Get used to stress because it is a natural process that a beginner trader must go through.
⦁ Understand a Stock’s Character.
A trader with strong intuition or a good feel for predicting price fluctuations usually develops this after observing a stock for a long time. For example, observe and understand the character of a blue-chip stock, which is very different from a penny stock.
Especially when using a scalping strategy, where most scalpers spend 80% of their time observing and only 20% executing trades.
⦁ Trade Without Emotions.
When you don’t have a trading strategy you believe can make a profit, traders usually become emotional, feeling euphoric when they profit or down and frustrated when they lose. Free yourself from these emotional situations with proper and thorough preparation.
So, friends, the key is to have a well-thought-out trading plan, risk management, and a proper trading system, which we can call the Profit Strategy, leading to a brilliant final result, just like Mr. Bekti Sutikna, who decided to become a full-time trader with a capital of IDR 15 million. According to him, scalping can be done with small capital as long as your skills are well-honed.
However, it all comes back to ourselves—whether we want to take the plunge and seize the opportunity or just sit on the sidelines as spectators. In the next article, I will delve deeper into fundamental and technical analysis.
