Tips for New Traders

GCM understands the importance for new traders to familiarize themselves with the platform and the different markets’ characteristics and trends. Therefore, we have provided a list of essential trading rules for beginners:

• Start small

• GCM allows you to trade in very small minimum trade sizes; take advantage of this while you are still unfamiliar with trading. You can increase your size gradually as you become more confident.
• Remember why you are trading
  Your primary objective should always be making money. You should also enjoy and have fun whilst doing it, but fun should never be your prime concern. Only place a trade after your have researched the market and have a clear direction. Otherwise, save you money for a better opportunity.
• Only risk money you can afford

• It is vital to have in mind how much you are actually risking at all times. It is equally vital to make sure you are comfortable with the amount involved. If not, the pressure you will feel from the fear of an unaffordable loss will undoubtedly lead to rash decisions.
• Have realistic trading targets
  Setting yourselves fixed target levels before you enter into a trade will help you overcome the influences of fear and greed. The targets could be things such as:
  • Profit goals (per day, month, year)
  • Size to trade at any one time
  • Entry/exit points
  You should define two exit levels: an exit point should things go wrong and an exit point for taking your profit when things go well. Of course, as you become more confident, these rules can be changed to fit any new strategy you may wish to employ.
• Be disciplined

• When you have lost on your last trade, it does not mean that you are more likely to win on your next trade. Doubling up should always be done with care: you should only increase your bet size by a substantial increment if you think there is a substantially greater chance of profiting more than before. Even then, you should take care to carefully manage your risk.
• Use stop losses
  A stop-loss will enforce your exit levels and will aid you to cut your losses.
• Expect losses
  You cannot win on every trade, even the best traders in the world get it wrong. Managing a losing position and acting swiftly to cut your losses is a hugely important (and difficult) skill. Analyse your losing trades and learn from your mistakes.
• Do your research

• Have your own opinion about every trade so that when you are ready to execute you are confident that you are taking a valued and judged view. You need to fully understand how the trade works and that you aren’t thwarted by some small detail of which you are unaware of.
  Here are a few tips that can help you understand your trade:
  • Read relevant company reports
  • Look at financial websites
  • Look at the fundamentals and historical charts
  • Investigate other factors that may affect the trade, economic indicators or announcements
  GCM offers free charting, news and research packages on our website, which are constantly being updated. GCM is an execution only platform and does not provide you with any advice on what or how you should trade.
• Monitor positions closely
  Checking how big your profits are when things are going well is easy, but it is just as important to monitor your losing positions to the same kind of scrutiny. When things are going badly you may have to act rapidly in order to prevent the situation getting worse.
• Ask questions

• You should never be afraid to ask a question, especially when you are new to trading. The easiest way to learn more about trading is to ask the professionals.