Trading is a risky process and almost every beginner trader will experience losses at one point or another. In fact, even experienced users of the Pocket Option platform are not protected from unsuccessful trades from time to time. Yet you shouldn’t be discouraged from trading. Learning, practicing, and protecting your positions is what is needed to achieve steady progress. Let’s look at some of the most essential aspects of trading that can help you get started and minimize losses.
Strategy
The first step is making a trading plan and setting up an understandable and easy-to-implement working strategy. There are many simple and common strategies traders use daily, some adjust them to their personal trading goals and others use a combination. For example, some traders focus on trend trading and use tools of technical analysis to identify the price direction of an asset and open positions in that course accordingly. Others rely on news that affects the price of their asset, or focus on trading at the end of the day near market close, assessing the trading that happened on the previous day to open positions. It is important to spend some time finding the one that suits your style and risk appetite. It is also necessary to decide on what kind of price analysis and signals you are going to rely on. Often traders use tools of technical analysis and indicators to identify correct signals and set-ups to identify price trends and open positions. Pocket Option offers a variety of tools, from more basic moving averages, that provide easy to interpret trends, to more complex like Ichimoku:
There are also many different trading instruments available on the platform. It is important to understand what they are and what factors drive their price action. Currencies are some of the most traded assets, while certain stocks can be quite risky. Some assets and sectors are more volatile than others; for example, cryptocurrency prices tend to have a large variance in their price dynamics; technology, and financial sectors also tend to experience significant price fluctuations.
Once you have decided on how you want to trade, when, which instruments, and using which indicators, start by practicing on your Pocket Option Demo account. It may be a good idea to start trading with longer time frames rather than quick 1-minute positions; they tend to generate clearer signals and reduce some of the psychological pressure. Next, you should aim at having a relatively high success ratio, perhaps at least 70%, before risking your capital. This also allows offsetting losing trades with the gains made on other positions and still end up with a positive balance.
After moving on to trading on a real account and making a small deposit, you might consider focusing on ensuring that your funds are not depleted for a long time. Beginner traders are often tempted to rush and place many trades, expecting profitable opportunities, and end up losing their balance quickly. It would be nice to make returns of course, but you need to make sure that your money management techniques are working and you are not running down your balance quickly.
Once you have mastered your trading strategies and made sure your risk management techniques are working, you can now focus on making returns. It is a good idea to set targets, weekly or daily, depending on your goals and risk aversion, and then see how often you need to trade to achieve them. You might want to make your targets are realistic and avoid overtrading, which increases risks on your funds. These are the essential steps to consistent progress on Pocket Option.
Starting small
Start with small amounts on your account. Although starting with a $10 budget may seem like a small amount to start trading with, you would not regret losing that money either. You might start by investing a small portion of your balance on each trade, making sure your account hasn’t been depleted at the end of the week/month. This approach helps to understand and practice basic money and risk management techniques, develop discipline, and a routine of analyzing before engaging bigger portions of your capital.
It also may be quite tempting to increase gains by trading several instruments at the same time or place larger amounts on each position. This makes monitoring and money management very challenging and leads to higher risk exposure. As a beginner, try focusing on one or very few instruments, trade a certain time frame with 1 working and easy strategy. Your goal should not be placing more trades but rather making sure they are as profitable as possible.
Let’s look at an example. Suppose GBP/JPY currency pair is being traded with the Pin Bar strategy and support/resistance levels. It may take time to spot a pin bar, which is a bar with a long wick and a small body that signals a reversal that formed next to the resistance level.
There may be other potential opportunities on this chart over the waiting time, but the focus is trading this specific asset, strategy, and a specific pattern set-up necessary for the pin bar strategy. Sometimes it may take several hours for the right conditions and signals to develop. That is why patience and emotional control are key.
Key Skills for beginners
First of all, trading requires a sufficient knowledge base. You need to understand how to read charts, understand what drives the market, how technical analysis and indicators work. Pocket Option tries to help you with that as much as possible. There is a variety of different indicators and drawing tools you can use on the chart, some basic ones and some more complex, depending on your experience and strategy. There is also a section with an economic calendar, analytics, and additional applications that can help you during the process:
Secondly, you need to learn how to control your emotions. Trading requires consistent and rational decision-making rather than impulsive action that does not follow a pre-determined plan. A common trap is to continue trading in an attempt to recover losses; often this is accompanied by a lack of rationality in the approach and leads to even more losses.
Finally, money management is key. It avoids excess losses that result from hasty decisions and too much risk-taking. Protecting your positions should come before seeking gains. Remember to control position sizes; Pocket Option allows you to specify trade amount as a percentage of balance:
Do not forget to look for the right conditions for the entry and exit points under your chosen strategy. Finally, remember to keep an eye on the market and look back at your performance and analyze the trading history. Patience, strategic approach, risk and money management are the way to consistent improvement.
Trading is not an easy process and takes lots of learning time, practicing, and making mistakes before one achieves steady gains. But we have seen that there are several basic steps for a beginner trader as well as important techniques that can help minimize losses. Best of luck and Enjoy Pocket Option!
Risk Warning: The trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. You should never trade money that you cannot afford to lose.