You would think that a stock market professional like yourself would no longer need to learn how to brush up their trading skills.
But just like a muscle, you need to practice to keep it sharp.
There is one issue, however – How do you learn how to become a professional trader?
Most ordinary people have no prior experience teaching themselves anything – the process can be incredibly intimidating.
In this article, I show you how I prepared myself and became confident even though I was a complete beginner.
Now I know exactly how to teach myself to trade the market – One day, just one day. What an amazing experience!
Now let’s get to the point.
Learn Chart Patterns & Technical Analysis
Technical analysis has been around for a long time but has been picking up steam recently.
Regardless of how families and friends make their living, it opens the minds of many to the notion that trading for income can be realistic.
But if you have been conditioned to believe trading is for crazy people, you might be at risk of spending money and becoming frustrated.
Don’t let this happen to you!
So the first piece of advice is to teach yourself to chart patterns and technical analysis before you invest any money at all.
You can easily do this with a free online charting service.
Just enter a stock’s ticker symbol and you will see a stock chart, daily high and low, volume, moving averages, and much more information. If you do not know the ticker symbol, a simple search for the company name and ticker will get you the information. For example, a search for fanduel stock ticker will inform you that their ticker symbol is FLUT.
Chart patterns and technical analysis can seem complex to the average person but a quick internet search will point you in the right direction.
Remember that you are in control of your own destiny and that no one has the right to judge you for exploring your options and pursuing your dream of trading for income.
You must be willing to accept that learning technical analysis and charting patterns is a time-intensive process. Learning takes time, my friend.
There are hundreds of trading cheat sheets, books, and online courses devoted to the subject (not to mention the thousands of newspapers, articles, and websites).
So just do your research and you will educate yourself.
Avoid Costly Mistakes
One of the biggest mistakes traders make is assholery, or what we call chasing their losses.
When a trade goes south, too many traders try to make it up on their next trade.
When you lose $100 on two trades in a row at a 1% per trade, it’s very tempting to go on a $300+ loser run.
That is not a good trading strategy. You will lose all of your money if you keep doing things that make you want to buy more stock at lower and lower prices.
You need to understand that there is no such thing as a free lunch when it comes to trading.
If you suffer from a losing streak, whatever you do, don’t do more trades to try and recover. There are better ways to do this.
First of all, make sure you do not trade on margin or with borrowed money or money you cannot afford to pay back immediately.
If you trade on a live account, set a stop loss that you are comfortable with.
The other alternative is to reduce your trading size so that you don’t get too emotionally involved with every trade.
Placing a stop loss is a simple way to implement this. Using a stop loss will eliminate the killing feeling when you make a loss.
Learn How to Protect Your Trading Account
Trading is risky. Even if you have the best strategy in the world, you can make a wrong decision, suffer a loss, and suffer a losing streak (which can be devastating).
Not to mention high account drawdowns can completely wipe out your trading account.
If you are a long-term investor, this isn’t entirely your problem.
But if you’re trading in the short term, you could find yourself in serious trouble without the right tools in place.
There are many things that can plague your daily trade and pull you off course.
As a beginner trader, you need to protect yourself from the following actions that could negatively affect your trading account.
Remember what started you out on top of your game, were you confident in your trading skills or were there market fundamentals you couldn’t control that influenced your trading process?
If there was something that happened in the early days of your trading career that caused your trading sessions to deteriorate, you need to work on fixing that situation before moving on to the next task.
Too often, the learning process is ignored until the first losing trade begins and ends in liquidation. If you haven’t ironed out the losses, it will happen again.
The best time to make adjustments to your learning style is in the beginning when there isn’t much to lose.
You need to not consistently ignore the signals of the market or the fundamentals of trading to avoid unexpected consequences and surprises.
When the appetite and level of trading competition increase, the odds are that the market will be more erratic, but that doesn’t mean that you should increase volatility.
You can always take volatility into consideration, but as a rule, most traders miss key signals and then act in the same manner the market acts.
Find an Online Trading Community
Are you looking for an online trading community to help you become a better trader?
The Internet has made the world a lot smaller, and connecting and finding traders has never been easier.
There are numerous online communities out there that you can take advantage of to grow your knowledge and skill set.
One hugely important component of a successful trading career is finding an online trading community that fits your needs.
This community can provide valuable resources, like workspaces where you can find detailed trading analyses, chat rooms to communicate with other traders and brokers, and virtual trading platforms where you can practice real-life trading situations.
Getting involved in trading communities is a great way to become more proficient.
A good trading community will have all of the pertinent data you need, and some will even offer a training area that can help you get better at your craft.
Some of the solid communities of traders are TradingView and the Wealthy Education E-learning platform. These websites and many more like them are a great place to get started.
Entering into online trading communities will help you with many aspects of your trading.
It will provide trading advice, help find the best trading tools for you, and just connect you to fellow traders and experts.
This is an invaluable resource for beginner traders like yourself.
Find a Mentor
You’ve got your stock trading education from a real trader, so you now know exactly what it takes to make money in the market – and nothing else matters.
But you need a mentor to help you out with live trading in real-life situations. You need someone to find the right signals for you.
But at the same time, you don’t want to be spoon-fed an expensive trading strategy – Because you don’t want to pay more than $8.95 for a lesson.
And there’s really no point in getting someone else’s sales pitch and expecting a miracle. You want real trading education.
So how will you learn to become a successful trader? You will need good training. But where and how will you find the support you need to succeed?
It’s very simple. Just sit down and think hard about what you want and what you can afford.
But keep in mind that no self-proclaimed guru on earth can create miracles for you. No one can force you to become a great trader.
It all comes down to you, and your personal strengths and weaknesses. You have to decide on the personal stuff.
You can learn to trade by yourself by studying the charts, and by watching the market acts, etc. Or you can hire a trading coach.
The option is up to you – no one can force you to do something.
Practice Makes Perfect!
We’ve all heard that practice makes perfect. That’s why it’s important to practice your trading skills as much as you can.
But just because you’re practicing doesn’t guarantee you’ll be profitable in the long term, so it’s important to know that and practice things that will give you an edge over the market.
Before you think about practicing and trading, you should know what you need to improve on.
By knowing where you’re weak, you can start improving your skills and become a better trader.
As an aspiring trader, it’s important that you practice your trading so that when your broker gives you the live account you can hit the ground running.
The only way to do that is to do paper trading. If you have access to a simulator set up your trading account and play around with various strategies.
Depending on how fast your computer is, move your trades around all day to see how the simulator reacts.
You can also adjust the time frame as well to see how your trading strategies work at different time frames.
If that’s not an option, you can set up a demo account with a broker. This will allow you to test your trading strategies without worrying about losing your money.
At the very least you should learn how your trading platform works before you attempt to trade.
Practice not only builds confidence but also makes you understand the market better.
Private Stock Can Give You A Break
If you get a bit tired of stock trading but still want to invest in a stock, consider private stock. Private stock isn’t affected by the wider stock market. Instead, it’s usually good to hold a long time until perhaps the stock eventually debuts as an IPO where you can make good on your investment. There are multiple different private stocks you could potentially look at as investment opportunities. Take Offerup for example. If you were looking to diversify your portfolio and wanted to invest in some consumer/lifestyle-oriented private stocks then offerup could be a good call. They’ve developed an online marketplace designed to change the way people buy and sell. Purchasing offerup stock stock isn’t too difficult either. Sometimes buying private stock can be a chore but there are a few private market trading platforms that make it easy – so you won’t have to approach offerup directly. Purchasing a private stock is a great hedge against the whims of the market too – especially if you’re expecting turmoil or a fall.
Key Takeaways
If you want to learn how to trade effectively and profitably, then the right mindset is crucial.
There are two things you need to understand:
The first is that you need to be emotionally detached from all of your trades, and the second is that you need to focus on your risk-to-reward ratio.
Those two factors will give you the chance to experience consistent profits in tough market conditions.
Over the years, there have been many studies on why some people become successful traders and others are unsuccessful.
It helps to admire the positive traits of successful traders and learn what you can from them so that you can become a better trader.
One thing to note is that most successful traders are persistent and never give in. They stick to their rules and always have a plan for the next day and the day after that.
But it’s important to note that staying persistent and sticking to a plan does not mean you never level out.
We are able to re-evaluate our plan as circumstances and conditions dictate. But, remember that successful traders do not give up or lose hope very easily.
You also have a better chance of being successful if you learn to be conservative. This means you manage your risk.
If you begin to trade without a stop loss, you will find yourself wiped out most of the time. But if you have a good plan and follow its parameters you will find more success.
If luck is not on your side and you lose money, there is no reason to worry. You all can and will make a good living trading the markets.
If you get the right combination of skill and discipline, you will succeed as a trader.
Everyone is different, but stick with a plan and execute it consistently and you should eventually see better results.
Good luck on your trading journey, and I hope that you will make a lot of money along the way.