How to become a better trader in 2025
As financial markets continue to evolve, successful trading requires a combination of disciplined strategy, risk management and continuous learning.
Essential trading knowledge for 2025
The trading landscape demands continuous adaptation and learning to stay competitive.
Understanding market fundamentals, technical analysis, and risk management principles remains crucial for any trader's success.
Modern traders need to leverage advanced analytics and trading platforms while maintaining disciplined emotional control.
A well-defined, written down, trading plan should guide all decisions, helping avoid impulsive moves based on market sentiment.
Managing risk effectively
Implementing proper risk management through tools like stop-loss orders (at all times!) is essential for long-term trading success.
The forex trading market and other assets require careful position sizing and portfolio diversification.
Never risk more than you can afford to lose, and avoid the temptation of excessive leverage. Risking 2-3% of total trading capital per trade is acceptable but risking 10% or more per trade is bound to end in a margin call or worse, you no longer having the funds to continue your trading journey.
The reason for this is that during a traders ‘trading experience’ there is a near mathematical certainty that at some stage they will get five or more losers in a row. When a trader risks 10% per trade, they would lose five times that, i.e. 50% of their trading capital during that negative run. They would then need to make 100% profit, just to get back to their starting point.
Using a demo account can help test strategies without risking real capital.
Common trading mistakes to avoid
Chasing losses and overtrading are two of the most destructive habits for traders to overcome.
Many traders fall into the trap of ignoring their trading plan when emotions run high.
A trading platform, and especially a trading phone app, should be used for analysis, not emotional decision-making.
Proper research and fundamental and/or technical analysis should drive trades, not social media hype or market rumours.
Developing your trading strategy
Start by defining clear entry and exit points for every trade using technical and/or fundamental analysis and make sure that these have a positive expectancy. This means that the entry and exit points are part of a trading strategy which is profitable in the long-run. One way of doing so is to make sure that average winners are larger than average losers or that each potential losing trade leads to a smaller loss than a potential gain.
IG’s weekly ‘Trade of the week’ illustrates this. Even though IG’s market and technical analysts were right about half of the time, they achieved a 31.45% hypothetical profit in 2024 whilst only risking 2% of capital per trade. They did so because they were disciplined with their stop losses at all times and on average made 1.6 times larger gains than losses.
2024 ‘Trade of the week’ per trade P&L graph
The idea behind ‘Trade of the week’ is for IG’s UK market analysts Chris Beauchamp and Axel Rudolph to show potential and actual traders how to place a trade, decide on where to place stop loss and limit orders while incorporating sound risk and money management techniques.
Please note that all 2024 setups and trade ideas in the weekly ‘Trade of the week’ videos were hypothetical and were not traded with real money by IG’s market analysts.
The trade ideas are recorded each Monday morning and can be seen on the main IG UK website as an article under ‘News and Trade Ideas’, on MyIG under both the ‘News’ and ‘Videos’ sections, and also on IG UK's YouTube channel.
For a more detailed analysis of the 2024 hypothetical ‘Trade of the week’ results, see this article.
By using trading signals and other tools to support your decision-making process, maintaining a trading journal to track performance and learning from both successful and unsuccessful trades and by being disciplined at all times, you can greatly improve the odds of becoming a profitable trader.
As a trader, you should quickly learn from your mistakes and must try your utmost not to repeat them!
You should also consider trading multiple timeframes, asset classes and analyse different market conditions when planning your trades in order to spread the risk.
How to get started
- Research different trading strategies and markets thoroughly
- Choose whether you want to trade or invest
- Open an account with us
- Practice with a demo account first
- Start trading with a clear plan and risk management strategy
Remember that successful trading requires patience, discipline, and continuous learning through reputable sources, such as IG’s Trading Academy or the Society of Technical Analysts.
Focus on consistent improvement rather than quick profits.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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