Trading for Beginners: How to Survive

Trading is a complicated process with numerous aspects to consider and high risks of losing money. Meanwhile, the market prospers with millions of new traders, creating their trading accounts in the hope of earning a fortune. Newcomers without any knowledge might consider trading as a casino, but those traders who take the market seriously will quickly learn how to earn money. You need to understand the basics and master your skills to become successful in trading.

Tips for Newcomers

If you don’t understand the process of price movement on the market, it is essential to learn the reasons. Your basic capital is not enough for success. A wisely built strategy is a key to earning money. This article can help you decide on the direction you want to go and understand how to start building the winning strategy.

Trading account

You can’t start a trading procedure without the account. First, you need to choose between numerous stockbrokers that offer their services. Go for the best one with the features you need and a trustworthy reputation. A stock brokerage account will open the market for you. A trading account is a must-have even if you already have a personal one. Start by getting familiar with this account and all the tools you have. Spend some time exploring it and learning the interface by heart.

Understand the market processes

Use versatile sources to gain new knowledge on the market. There is a lot of information in financial articles and reviews of famous analysts released in specific journals and magazines related to the market. Books about stock markets are more than enough for basic knowledge. After that, you can start tutorials and crash courses on online educational platforms available worldwide. 

The main trick is not to focus on a narrow object and continue to broaden your knowledge. This way, you can earn money from different areas and will understand the market better. You can concentrate on the market in general and its processes, even though you treat them as irrelevant for now. Learn everything, including the ideas and concepts created by successful traders. The information might come in handy in the most uncertain time.

The must-read books for beginners are:

  • Martin Zweig’s “Winning on Wall Street”;
  • John Murphy “Technical Analysis of the Financial Market”;
  • Jack D. Schwager “Stock Market Wizards.”

Devote some time during the day to monitor the market. One hour might be enough to read about the markets you are interested in, price movements, the current state of the world economy, politics, statements from CEOs, and so on. Don’t ignore the reports on the foreign markets. Bloomberg and The Wall Street Journal provide you with exclusive analytic articles and thoughts of popular traders.

Improve your analytical skills

You have to start by working on your skills. The critical mind is usually something you can reach after years of practice. There is a wide range of courses offered online. Meanwhile, technical analysis is the first lesson you have to learn. It provides you with the keys to the market and constantly updating charts that reveal more information than you might comprehend the first time. You need to know how to read them if you want to survive there. Concentrate on the spreadsheets revealed by the companies you trade with/against.

The charts of different shapes and time frames might save your trading career someday. Their technical analysis uncovers the secrets behind the numbers and allows you to predict the future. While all the securities could be either lower or higher in theory, in reality, they can even be chopped sideways for many days and weeks, ruining all your plans. There is no way even the most experienced trader could give you a 100-percent guarantee about the market, but you can still learn how to lose less money during uncertain times on the market.

Practice your moves in advance

It sounds obvious, but not many new traders want to spend their free time practicing and learning to trade. However, it is an important action that will lead you to the goal you’ve set. No matter whether you try virtual or paper trading, some features provided by trading agencies allow you to practice actions without consequences. You can try to buy or sell and calculate possible profits or losses while you are still learning. Many agencies offer market simulators, but if your trading account does not provide a similar tool, you can find it online. This way, you receive the feeling of the real stock exchange. Your actions matter, so check the strategies you’ve learned.

If you find simulators boring, try numerous games based on the stock market. You don’t have to waste your money. There are mobile apps that are easy to download and simple to play. They are valuable for newcomers since they help to understand and learn the basics.

After the Crash Course

As you’ve learned the basic rules, now you can start working on your strategy. Follow the tips above, and you will be able to understand the market’s processes soon. Test your knowledge of simulators, read more books and journals on the topic, and someday, we might read your expert advice here.

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