New to the World of Investing? Get Started as a Trader
$DIA, $SPY, $QQQ, $VXX
If you are new to the investing world, your experience is likely very limited or none at all.
You may be thinking about becoming a trader because you heard about how exciting the stock market is and the profits that can be had working at home.
Whatever your motivation, becoming an investor or trader in the financial markets is easier said than done.
The financial (stocks, bonds, commodities, currencies) markets can be a very tough place and a solid grip on emotions is required if you are to be successful is a must, there is no room for emotions.
It is your money, so it is your responsibility
Once you decide you are prepared to do the work required, know that it takes years for investors/traders to develop and sharpen their skills.
But, do not let this discourage you. This means that now is the time to take the 1st steps towards learning the trading basics.
It is good to have access to multiple resources such as formal training or a mentor.
Below is a Game Plan on how to get started, as follows:
1. Sign up for an online course in trading basics: If you are a beginner, an online course is a convenient place to start. Remove all the myths and rumors you have heard about trading and listen to the professionals who have had decades of experience.
In an online course on trading principles and strategies, you will gain a basic understanding of why stocks are traded. Learn terms like technical analysis and fundamental analysis and the reasons they are used in trading. You will be introduced to the charts, technical patterns, and strategies. And most importantly, you will learn what the right mindset is for trading success.
The Big Q’s are: Do you truly have what it takes to survive in this industry? Do you have the right attitude? Do you have the drive? Also, online courses usually come in series and you can level up to the next course once you’ve mastered the basics.
2. Find a mentor or a teacher:Perhaps you became interested in trading because you have a friend or family member who is already a professional trader. Ask them if they would be willing to coach you. They may do it for free or for a fee. Consider how much value their knowledge and experience is worth. Realize that paying them to be your teacher, this is an investment in yourself. If you do not know anyone who is a trader that can mentor you, visit trading forums and ask for recommendations. There may be someone there who would be happy to answer all your questions.
3. Read trading eBooks: Just as there are webinars, there are also plenty of eBooks out there if reading text is what helps you absorb the information. There are even free eBooks out there that guide you through all the basics with even a few secrets to getting you started.
4. Self-study and follow the market: A wealth of information that can be found online and in libraries. New investors turn to news sites like Google Finance (NASDAQ:GOOGL) or Yahoo Finance (NASDAQ:YHOO) to start understanding basic trading terms. Once you comprehend the terms, LiveTradingNews, Bloomberg and The Wall Street Journal be so overwhelming to follow anymore. When you start to read the headlines and monitor the markets, you’ will start to expose yourself to trends, economic concepts, and general business. The more exposure, the more you realize how much of this new language you can now understand and speak.
5. Use a simulator to practice trading: When you begin to feel moderately confident but still unsure, some online brokers offer virtual trading services that are completely free where you can practice live during an active trading session. Simulators are great for beginners who still have a day job and do not have a whole lot of time to spare over the week to practice. With a simulator, you can practice at your convenience and even when the market is closed. Simulators even have pause/resume, fast forward, and slow motion options to really allow you to absorb all this new information. In reality, you obviously do not have the ability to pause until you can emotionally and mentally catch up. This is excellent practice to prepare you for the real thing.
6. Join a Live Trading Room: Live trading rooms are the perfect place for you to get practice. Live trading rooms like the one on Live Traders prove to be critical in the growth of any trader. Through live trading, you receive immediate feedback. You get the opportunity to network and learn from a variety of traders with different levels of experience. Imagine being a virtual room filled with potential mentors. Live trading rooms will allow you to witness the emotional whirlwind that traders will inevitably get caught in. Through Live Traders, you will be learning from the industry’s best who want to help you get started by building a reliable network. You will experience real trading and actual results. You will see real-time updates on management. Best of all, you will have a community to approach for real support.
7. Learn from the Greats: There are stock market legends, great traders who have made names for themselves and have gone on to mentor others, hold seminars with thousands in attendance, and have published books.
Topping the list of top stock market legends are Andrew Abraham, Bernard Baruch, Jack C. Bogle, Warren Buffett, Steve Burns, Daniel F. Chambliss, Richard Dennis, Richard Donchian, William D. Gann, and Dennis Gartman.
While you may not have the opportunity to learn from the Greats investors and traders personally, studying them will provide you with inspiration to keep going when you start to question if trading is for you. They will offer their perspectives, and through them you will discover a deeper appreciation for the game.
Remember, “a journey of a 1000 miles starts with the 1st step”