I would kill to have this beginner guide to trading back in the day when I started. Everything would be easier. So, if you want to know the life of a day trader and become one, keep reading.
There are hordes of aspiring investors who jump into trading without learning anything. For every task in our life, we need to first learn the basics.
If you have in your mind right now the question of How Do I Become a Day Trader? or How do I Start Trading? Don’t worry, we have gathered all you need to know in this beginner guide to trading.
Trading takes certain skills everyone can learn if they take the time to learn and patient. To be a successful trader, patience is a must-have
An aspiring trader should aim for the relationship between money and self-worth before jumping onto the trading wagon. Once you have that lined up, improve your chances of trading by learning to trade with skill and authority.
1. Choosing a Trading Style that suit you like a charm
The first thing the reader of this beginner guide to trading needs to do is decide a trading style. This is the most important task here. This’ll determine if you spend the whole day or a few moments a day trading.
Since day trading is one of the most famous styles of trading almost every beginner chooses this one. Fast-paced trading. As its name suggests, you will be closing your positions or your open trade before the sun goes down.
If you were asking yourself How To Be a Day Trader? then this one is for you.
Careful, a signal can happen at any time given, so you need to be up to it!
On the other hand we have Swing Trading, with his slow-paced trading form where you hold your position. Yeah, for one day or week, depends.
So, following the name, a trader is on hold aiming for the medium or high-term price swing that may happen
This one is the favorite of the people that want a side income, they can trade while they’re still working. All you need to do is scan the market looking for a signal, set up the order and done, come back and check it tomorrow.
This one is a lot slower than Swing Trading, here usually the trader holds his position for weeks, months, or even years. Yup, pretty slow. Aiming this way longer trends based on strategies
As seen with the Swing Trade the Position Trading doesn’t need a lot of time to put in place. Perfect for the ones reading the beginner guide to trading from a full-time job!
Robots! Or something like that! This form of trading consists of a bunch of rules executed by a computer. This means you will not have to be in front of a chart for a lot of time.
Lots of people say this is a passive way of trading. Also, traders using this style tend to put in place a lot of strategies to increase the profit. And they loses and risk handling.
2. Open a Trading Account
A credible trading platform such as MetaTrader 4 is the best place to begin. They will start you off with a free demo account that allows you to learn before you begin trading . Learn the interface as well as the free trading tools provided.
Also, the trading platforms offer a wide range of products to trade from. MetaTrader 4 supports cross-device as well as cross-platform trading. It is also equipped with a range of valuable research and analysis tools that are vital to traders.
3. Read and Research
There is a plethora of information available out there. For instance, you can access eBooks online as well as website tutorials. There are also hundreds of stock market books and a wealth of financial articles both online and in the dailies.
Study ideas and concepts that may not be applicable at the present time. They may be relevant in years to come. A good grasp of the world of trading will hold you in good stead as you trade. Knowledge, as they say, is power.
Also, follow the market every day and read about the overnight price action on foreign markets. The latter is best done early in the morning. Follow informative sites such as CBS MoneyWatch as well as Google Finance and Yahoo finance.
4. Learn Analysis
You may not be aiming to be the expert on price action analysis…at least not yet. Yet, some knowledge of technical analysis is very helpful. You may have heard that fundamental analysis is the better bet because it covers growth and curves.
But, price action is the gospel seasoned traders swear by as it deviates from underlying fundamentals. Also, examine tons of price charts in all time frames as well as company spreadsheets.
You are building up your ability to predict the price. In theory, securities are expected to go high or go low. This encourages long-side trades or short sales. Prices are dynamic and can seesaw into any direction leaving buyers and sellers surprised.
Traders must be keen on time horizons when this happens because of trends and ranges of trading. Independent movements generate movements at the following intervals:
These have been known to happen all at the same time. The majority of the trading opportunities appear via the interactions between these intervals.
5. Practice Makes Perfect
You have done the groundwork. It is time to put what you have learned into practice. Virtual trading offers the rookie trader a great opportunity to follow real-time market actions. You can make a load of trades with a variety of strategies.
Use various holding periods and then examine your results for noticeable faults. Once you get the hang of it, you can start trading using real money. Remember that the flaws that were revealed during paper trading may show up when you start real trading.
It is important to remember that you can make profits as well as losses. Thus, you must always be careful to trade only what you can lose. As you gain experience, you will start putting up more and enjoying the results of your patience.
Begin by learning the financial markets, read the charts, and observe price actions. Build your trading strategies with the observations in mind. Test them in your demo account before you start trading for real.
We highly recommend our readers to start off with the Swing Trade. It’s easy to set up and doesn’t take too much of your time. As we say up there when we were talking about the steps, this totally depends on you, trading is a financial and a spiritual journey.
There’s a bunch of documentation on the internet, read a lot, and watch a ton of videos. Set up a training account and practice all you can with a lot of patience you will be set up to start.
But, we have a lot of posts and free mini courses teaching flawlessly how to start trading.
This one is the most common question on this trading topic. Yes, you can. There are a lot of brokers giving the opportunity to traders to do trading with amounts like 100$.
1. You’ll be using Trading Leverage
2. You, by any chance, should be taking big risks, which means big losses sometimes.
3. Some Trading Brokers have accounts designed for lower amounts of money.