Protecting Yourself and Making Informed Trading Decisions

What are the key principles to be profitable in trading?

Have you ever wondered what allows a trader to consistently generate profits? The key lies in making informed decisions at the optimal moment.

Achieving precision requires a solid foundation and key principles, especially early on. This article outlines strategies to help traders reach their financial goals.

Make the right decision and continue the trading journey:

The Japanese proverb, "If you want to learn the higher truths, start with the alphabet" highlights the importance of mastering the basics in trading to achieve long-term success.

The first critical step is choosing a reliable financial broker. To do so, ensure the broker is licensed and regulated by a recognized authority, either through a direct visit or by verifying their credentials with the relevant body.

It does not stop here, check the broker’s reputation by reviewing feedback on trusted platforms like Trustpilot.

Trust indicators on a broker's website include clear, accessible contact information and detailed company history. Additionally, security protocols to protect personal and financial data, along with identity verification procedures before being allowed to trade, are key signs of trustworthiness.

It is important to address a common misconception: a company’s license is not very important!The truth is quite different.

Regulatory bodies require brokerage firms to meet specific standards, such as maintaining a certain level of regulatory capital, to protect client funds and ensure ongoing supervision.

Also, dealing with licensed brokerage companies ensures legal accountability in disputes, and protects financial rights.

In addition, licensed companies have internal compliance departments that ensure compliance with legal requirements transparently, which enhances trust among clients.

Licensed Broker: The First Risk Management Tool!

Selecting a licensed broker is the first step in effective risk management. These brokers provide security, trust, and educational support, helping traders understand trading and manage risks.

Did you know that licensed brokerage companies ensure risk management by adhering to legal leverage limits? 

Leverage is a great tool provided by brokerage companies to enable traders to execute large trades with a small capital, such as 1 to 100, which means that a dollar can buy an instrument worth $100. 

A licensed brokerage company adheres to the legal limits allowed for leverage, which are set by regulatory bodies to protect traders from excessive use of leverage that exposes them to losses.

In short, choosing a licensed broker ensures trust, transparency, and successful risk management for traders.

Trading or investing or nothing? 

If trading means executing a buy or sell deal quickly, to benefit from price differences and movements, then investing means buying an asset and keeping it for a longer period with the aim of making profits after its prices rise.

Here comes the question: What is better for making profits? Trading or investing? Or neither?

We remind you that the best decision is the one that matches the pre-determined goals, and is appropriate for the trader's financial situation, and his method of managing risks.

If you are looking for quick opportunities with a small amount of money, and you can analyze the markets, and have risk management strategies, then trading may be the best for you, while if you are looking to own financial instruments and make profits over longer periods, then investing will be suitable for you.

 However, if you do not want to analyze or follow up on any long-term investment, saving may be the best for you to benefit from the accumulated money later in achieving a future project or meeting future expenses, which is the most prominent goal of saving, which is achieving a social security network.

So, the decision between trading and investing or something else, depends on your decision, so make your decision informed!