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Trading Academy
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Building a Solid Foundation for Your Trading

In this video, Roger Hawes, a Corellian Academy Analyst, emphasizes the importance of building a solid trading foundation to address common trading problems and ensure long-term success.

Hawes refers to the theory that suggests that 80% of our decision-making is driven by our emotions. According to this theory, once emotional decisions start taking over, the risk of losing your capital becomes higher.

To build a solid trading foundation, there are a few measures that should be taken. First, traders need to identify the key- mistakes in trading, such as impulsive trading due to fear of making a loss or leaving money on the table, Fear of Missing Out (“FOMO”), and cognitive bias.

Research is also a vital component of a well-structured and disciplined trading approach. Accordingly, traders may want to investigate market fundamentals and macroeconomic factors driving markets in order to be able to adapt to changing conditions.

Another key step is using Risk Management tools. As such, traders should assign risk levels to each trade based on their confidence, market conditions, and trading history. It's essential to have a personalized risk management strategy.

All of the aforementioned steps are important since a trading strategy is essential for entering and exiting trades. This includes setting stop-loss indicators and aiming to take profit at realistic targets.

Moreover, traders may also want to evaluate their performance objectively after every trade. This evaluation should not be used for self-criticism, but rather to identify areas for improvement and keep a disciplined approach.

In conclusion, according to Hawes, traders should stick to their trading process, avoid impulsive decisions, and adjust their risk levels as needed. In return, building this foundation can help them maintain discipline, manage emotions, and improve their chances of long-term success in trading.

These webinars are provided by Corellian Academy and are subject to its privacy policy. The information is general in nature and does not consider your objectives, financial situation or needs and should seek professional advice before acting on it. No representation or warranty is given by Plus500 as to the accuracy or completeness of this information. Past performance is not a reliable indicator of future performance.

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