What is a financial trader? These are specialists who take part in stock trading on behalf of clients or at their own expense. They are buying up financial assets on the stock exchange to sell them more expensive in the near future. The difference in prices is their profit. Such a business can make any person rich and successful, but it can lead to complete bankruptcy. Many people are interested in how to become a good trader to get high income from activity on the stock or currency markets. But is it really that simple? Many believe that mastering this profession is quite easy because you do not need to have any special skills to get started, and they also believe that professionals earn a lot barely doing anything for this. However, this is far from the truth. In this article, we will talk about how to become a financial trader and try to help you avoid some pitfalls.
What Steps To Make?
A novice trader is full of enthusiasm and anticipates huge profits. Only some minds show rationalism and reflect on the question “Why are there so many traders around, but few of them really make money?” and these people tend to succeed more. How to become a successful trader? We have prepared a complete guide for you! Just keep in mind every piece of advice given in this post and follow these steps when starting your trader career!
- Step one: Practice!
Everything starts with a bit of practice regardless if you are going to become a writer at essayvikings.com/dissertation-writing-services or earn your millions in any other way. Practice is always the first step!
We mean to start your activity on a demo account and only after successful testing of the chosen system – try to trade for cents. Agree, with real money, albeit small, you feel completely different from when you know that you risk virtual money. This is one of those mistakes everyone makes.
Using a demo or cent account, a new specialist receives many benefits:
- Maintains the mind in good shape;
- Develops a “sense of the market”;
- Can test new trading techniques;
- Can parse errors from real trading;
- Expands the comfort zone, increasing the Deposit.
Do not disdain cent accounts! Even if you are an experienced person – using new trading methods, you will significantly reduce the risk of losing money if you take it slow and increase deposit only after making sure that everything works well for you.
- Step two: Search for new tactics
The main feature of the market is the constant change in the rules of the game. Due to the new economic conditions, the market is constantly changing. That is why it is better to use more than one approach to trading.
Many traders believe that there are only 4 main tactics:
- Scalping when a trade is closed in a few minutes maximum with a profit of 1 point;
- Trading on the change of trends within a day at the close of one session and the opening of another;
- Trading within the session, the goal is 30-50 points;
- Positional trading on medium-term trends: weeks and months (requirements: clear trading system and large capital).
- Step three: Do not trade against the crowd
You have to “understand” the market and keep in mind that the trend is always our friend. Do not catch short rollbacks, which requires experience and skill, try to first learn how to get a small profit.
- Step four: Keep a log of transactions and regularly examine the results of your work
Regardless of their experience or approach – investing, short-term trading, technical, quantitative or fundamental analysis – almost all good specialists agree that it is extremely useful to keep a log of all your trades and learn from past experiences.
- Step five: Avoid the market forums and social networks.
The advice may seem strange, but if you think about it a little bit, it becomes clear that forums for beginners are a waste of time. If you think of what people are doing on such forums, the answer should come quite fast – they only use such platforms to communicate and fight each other.
Professionals prefer to maintain their blogs instead of communicating on forums. Try to find one, take a short look at it and you will find some useful and real pieces of advice.
- Step six: Divide your trading capital into several parts.
Another common mistake of a novice person is while opening a deposit, a newcomer transfers all his money there. The fact is that the trader loses his first trading deposit is pretty common. If all novice traders only won, then who would work at the factories and offices???
In order to earn consistently, you have to become a professional trader, and for this, you have to pay you money (to pay the teacher or the market itself, because the market is also a teacher).
It is necessary to divide your capital into parts that would have the money to continue your activity in any case.
What else should you understand? There are two types of traders – those who have money to continue trading (which means there is a chance to earn), and those who do not have this money (there is any chance to earn).
We can talk for hours and hour about how to become a successful stock trader, but the tips will be only a 50% of success. The other 50% is the experience. You have to try it yourself (following the steps we mentioned above) and see how it works.