So you want to build wealth or more income but don't have any ideas on what business you'd like to start or where to even begin ? Well don't worry because I've got you covered with an idea.As the title of this post suggests, I'm talking about how to start trading
Isn't trading online just a form of gambling ? Aren't there huge risks involved in doing this ? These are some questions you might have right now and you'd be right to ask such things.
Let me answer by saying yes and no.
Well, what I mean is if you don't treat trading like a business, then I'm afraid everything you do is gambling and there can be huge risks involved in it without a structured plan.
The fix ?
Work as hard as possible like any business, get educated and then you are in with a chance to get yourself going in the stock market.
It's really important to manage your expectations. It's a tough job but very rewarding if you are one of the lucky few who succeed.
So lets get into the nitty gritty stuff, where do I even begin ?
If you prefer video format, you can watch it below.
Right, first things first, get some education. A doctor wouldn't perform a medical procedure without proper education so why should a trader start trading without proper education ?
But I cannot afford to pay for a course right now ...
Luckily, there are tons of free services out there to learn to trade as well as paid services.
For the purpose of this post, I'll list the most helpful free resources to learn about online trading.
It's all about keeping your costs low when starting out.
Stock Charts Chart School is a free resource where you can learn to read price charts. The school section does a great job of explaining the basics of technical analysis and trading indicators with some useful articles on trading itself too.
TradingView is a free charting software where you can analyze anything from stocks to currencies. You can also set up scans and alerts. They have a paid version but the free one is more than enough when starting out.
Investopedia is a great website with many trading & investing related articles to help you understand the basics.
You can also read these trading books to help educate and show you what is possible in the markets. Some of the mentors recommended below also offer trading education services.
These trading podcasts also offer some great insights into the world of trading and the stock market as a whole too.
2.Create A Trading Business Plan
Now that you have some education, you'll want to create your own trading plan. Typically, this is different for every new trader as there is no one way to trade the markets.
You'll want to be as detailed as possible in this. I've included a free downloadable trading plan template that's easy to follow and will get you started at the beginning.
You'll notice the level of detail required so make a plan for every occurrence, even a power outage!
Remember the old saying:
"Fail to plan, plan to fail. "
Don't worry about not being too detailed at the start. Give yourself time to get the hang of things and practice. You'll get there with determination and hard work.
3.Choosing A Broker To Trade With
Now, we have a basic understanding of the market and have created our trading business plan, where can we find good brokers to pick ?
This can be a very delicate topic as everyone has their own unique preferences on what they like from a broker.
There are tons of brokers out there so my advice would be to download a few simulators from them and see which broker you might prefer.
Simulated trading essentially means you use the broker software but the money is not real, definitely a great way to test out the software and how it works without risking any of your hard earned cash.
Investimonials has great review lists on the best brokers for stocks, futures, forex etc.
Alternatively, you can read the broker recommendation post for ideas.
This is all great, but how do I even use this software ?
If you don't know how to use the software, do not worry. The fact is the majority of people starting out haven't a clue how to use it.
Luckily for us, there are loads of resources in learning the software and the majority of brokers have tutorial videos on how to get set up and use their features.
If the resources within the brokers website aren't enough, you can always reach out to them via email or live chat. You can also schedule a live training session where a member of their team will run through any questions you might have.
Give yourself time to sort things out with this. Learning how to use all the different functions and tools is very important so don't rush it.
4.Make A Trading Journal
This is by far the most important thing you can do. I cannot stress enough the importance of writing down all of your trades.
A lot of the best traders and investors in the world became profitable when they looked at their own trading journals and made tweaks to it.
When starting out, a simple spreadsheet is more than enough and you can include everything in it from what price you entered & exited to how you were feeling in the trade. i.e. anxious, relaxed etc.
You might not understand this yet but the amount of information you can get from simply doing this is amazing. And spotting patterns can help enormously because you know where to improve.
You may be wondering,
I'm not very good with spreadsheets, is there anywhere I can just journal and have the stats populate for me?
Yes! And it's a great. A cool tool that gives you lots of data on your own trading is Tradervue. The first 100 trades a month you plug into their platform is free and then a small fee thereafter.
You can get anything from the time of day you are most profitable to your best and worst trades. The free version is more than enough when starting out.
Heres a quick how to video on the software
5.Find A Trading Mentor
You've done and followed the above steps. Now you are up and running in the market. You'll need to find a trading mentor. Some people say you are better off learning alone and it really is down to the individual. But I am a big advocate of finding someone who has already achieved what you want and learning from them.
The problem today is finding someone who is real and not some scam person trying to swindle you out of your hard earned cash.
Once you get a taste of the style of trading you prefer, i.e. day or swing trading, there are lots of traders out there willing to teach and educate you to help further your trading education.
For people wanting to find a day trading mentor, these day traders offer their services to the public. If you prefer swing trading, these swing traders are offering there services also.
Again, you may find your own people that help you and that is great. It all boils down to the individual and what they prefer.
So I've Done All This, Now What ?
Now, you are on your way to trading online. There is no point in painting a rosy picture that you will make millions straight away.
The truth is it will take people a long time and lots of hard work to even make progress but if you can figure this business out, it certainly can be the best job in the world.
There is no shortcuts to success in this career just take it step by step, once cent at a time..
You'll hear figures in the industry like 80-90% of traders fail and this Yale study would certainly back up those statistics.
But, as you already know, hard work is crucial for any sort of success.
It might not guarantee any success but it certainly puts you on the right path.
So with that, I hope you found this some what useful and the very best of luck on your own trading journey if you choose to go down this path as a career.
It can be somewhat daunting starting out with all the information out there. I know this first hand as I struggled in the beginning to get going but I'm glad I did now.