These essential trading tips are actually what should be called the, “Golden rules” of trading. In other words, these are things that you absolutely, positively, must do in order to be successful in trading.

Do not trade with money you cannot afford to lose – While this may seem obvious to the majority of us a large number of beginners enter into trading without being financially prepared. While you may see trading touted as a way to make quick and easy money or a get-rich-quick scheme, trading should not be viewed as an income opportunity. Beginners should not dare do this because their lack of expertise creates a high probability that they will, in fact lose their initial capital.

Learn to trade – While this is another one of those things that seems logical and obvious to most of us, you would be surprised at how many people simply do not prepare themselves for trading success. If you take a look at the statistics, the most successful traders are those that have learned to trade. They took the time and put forth the effort to make a plan to excel in trading.

Keep good records – We all receive statements from our brokers. We can see at a glance what are account balances are simply by logging into your online trading account. While this is convenient, it is always a good idea to double check these numbers and keep records of your own.

Always control your risk – Controlling your risk is perhaps the most important concept to grasp in trading. As simple as it is, it is unfortunately a concept whose importance is recognized when it’s too late. A large percentage of beginning traders ignore risk control initially and then only pay attention to it after their account balance has dwindled substantially.

Exercise patience – This is one of the toughest things for beginning traders to do. When you’re starting out is quite natural that you want to, “see some action” and trade. Take only the trades that your trading strategy dictates that you should take. Your trading strategy should be designed to enter into only those trades with the highest probability of success. By jumping the gun and going against a proven trading system you’re setting yourself up for failure.

Have a proven trading system/strategy/method – Don’t guess or shoot from the hip. Before you take a single trade with real money you should already have a proven trading system in place. A proven trading system increases your probability of success.

Don’t make a bad situation worse – Adding to losing trade is an example of making a bad situation worse. When you’re in a losing trade the market is telling you that your trading system is not in sync with it. No matter how good your trading system is it will not always be in sync with the market. When you’re in a losing trade let that losing trade run its course. Do not make it worse by adding to it.

Changing your risk parameters to increase your level of risk is another example of making a bad situation worse. While it is possible that the market may turn around and go in your direction, the possibility also exists that it will continue to move against you. In this case you will be left with a loss that is greater than was necessary.

We just covered some essential trading tips. These tips are good to keep in your, “mental checklist” as you trade. This mental checklist of essential trading tips will help to keep you on track as you progress in your trading.