HOW TO GET STARTED IN TRADING
Do you want to know how to get started in trading? Do you really want to know the secret to breaking into the trading markets? It’s actually very simple. Trade.
Maybe a little over-simplification there, but it is the only way to get into trading. You can read and study as long as you like, and the longer you research and study the more information you will find, and the more you will find there is to learn. Trading is a continuous development practise.
You will never know everything and, even if you could know everything, the markets would still have a few surprises for you.
So start trading!
No one is expecting you to start trading big with your own money, which is a guaranteed trip to bankruptcy.
You’ve already done your research, you like the idea of trend trading, you don’t think you have the patience to “buy and hold” and you really like the sound of scalping. However, you have yet to put any of these ideas and thoughts into real-world practise.
If you haven’t already done it get a demo account with your broker (if your chosen broker doesn’t provide a free one then find one that does).
In the beginning, allow yourself to ‘play’ with your fake digital balance. If technical analysis is the way you want to analyse the markets, go ahead. Use all of the information you have already accrued and see if you can spot the indicators that signal a shift in the markets. And when your trades manage to lose your entire balance, go back and analyse where you went wrong. Then start again.
If a fundamental analysis is your preferred method of judgement, then you will want to carry out a thorough historical chart analysis in conjunction with the corresponding historical news and events.
You will probably want to use a demo account for several months, to really find out how you want to trade. When you get to a point where you are consistently adding to your account balance you will be ready to try a live account. You may have noticed that I didn’t say when you are “consistently winning”, even the most successful traders still lose quite frequently. Their trick is to keep the losses smaller than the gains, to maintain net profit.
By the time you are ready for your live account you should have already decided on your trading strategy, you’ve found the rules, methods and tools that work for you.
Now is not the time to deviate.
Start small with your live account, don’t put all of your capital in the basket and don’t trade volumes that have the ability to wipe out your account. Keep to your rules.
I’ll reiterate that this is not the time to deviate from your chosen strategy. It is often that case that when making the transition from demo to live accounts there are two opposing trends; on one hand the supremely confident trader will go large (and consequently bust) because he believes he’s found a bullet-proof methodology, on the other hand, the overly cautious trader will become less brave, even when acting on solid information, now that he’s dealing with real money. The ideal is to maintain that middle ground, balancing the fear of loss with the confidence in your strategy
You have a live trading account with a small balance, time for your first trade. That first trade, with real currency, will probably be a nerve-shredding experience. That’s okay, the first step is always a big one.
And you’ve done it, you got started in trading. Now all you have to do is keep going.