Every year on the market trading online, millions of newbies try to trade on this “casino”, but most of the newbies never reach their full potential and become poorer and wiser. Most losers have one thing in common: they don’t have the basic skills to make the odds work for them. However, if one spends enough time learning them, it may increase the chance of success.
The world market has attracted speculative capital like moths. Most people invest in securities without understanding why prices will rise or fall. Instead, they chase hot tricks, make binary bets, and sit at the feet of experts, allowing them to make meaningless buying and selling decisions.
A better way is to learn how to trade the market with skills and authority. Start with self-examination and carefully examine your relationship with money. Do you see life as a struggle, requiring hard work to earn every dollar? Do you believe that personal attractiveness will attract your market wealth like in other life pursuits? More ominously, do you regularly lose money through other activities and hope that the financial market will be more friendly to you?
No matter which belief system you use, the market trading online may reinforce this internal view through the income statement. Hard work and charisma support financial success, but losers in other industries are likely to become losers in the trading game. If this sounds like you, don’t panic.
Instead, take the self-help route and understand the relationship between money and self-worth. Once you have a firm foothold, you can start learning to trade and start with these five basic steps.
1 – Open a trading account
Sorry, it seems that what we are going to say is obvious, but you never know! (Remember the person who did everything to plug in the new computer-except to plug in the computer?) Find a good market trading online stock broker and open a stock broker account.
Even if you already have a personal account, it is a good idea to separate a professional trading account. Familiar with the account interface and use the free trading tools and research specially provided for customers.
Many brokers offer virtual transactions. Certain websites, including Investopedia, also provide online broker reviews to help you find the right broker.
2 – Learn to read: A market crash course
Financial articles, stock market books, website tutorials, etc. There is a lot of information there, and a lot of information is not expensive. It is important not to focus too narrowly on one aspect of the trading game.
Instead, research everything from a market perspective, including ideas and concepts that you currently don’t think are particularly relevant. The trade will start a journey, usually ending at an unexpected destination from the starting point.
Even if you think you know exactly where you are headed, you will be provided with a broad and detailed market background over and over again.
I start to pay attention to the market trading online every day in my spare time. Get up early to understand overnight price behavior in foreign markets. (A few decades ago, American traders did not have to monitor the global market, but this has all changed due to the rapid development of electronic transactions and derivatives that connect the global stock, foreign exchange, and bond markets.)
News sites such as Yahoo Finance, Google Finance, and CBS MoneyWatch are great resources for new investors. To get more complex reports, you only need to read the Wall Street Journal and Bloomberg.
3 – Learn to analyze
Research the basics of technical analysis and view thousands of price charts in all time frames of the market trading online. You might think that fundamental analysis provides a better way to profit because it tracks growth curves and income streams, but traders live and die because of price behavior that is very different from the fundamentals.
Don’t stop reading company spreadsheets, as they provide a trading advantage over people who ignore them. However, they will not be able to help you through the difficulties during your first year as a trader.
Your experience in charts and technical analysis will now lead you into the magical realm of price prediction. In theory, securities can only rise or fall, thus encouraging long trading or short selling. Prices can do a lot of other things, including a few weeks at a time or a violent swing in both directions to get rid of both buyers and sellers. At this moment, the time frame becomes extremely important.
Financial markets use fractal characteristics to study trends and trading ranges. These fractal characteristics will produce independent price changes, in short, medium, and long-term intervals. This means that a security or index can simultaneously form a long-term upward trend, an intermediate downward trend, and a short-term trading range.
Most trading opportunities will unfold through the interaction between these time intervals, rather than complicating forecasts. Buying on dips is a typical example. When traders sell stocks in lower periods, traders will jump into a strong uptrend.
The best way to check this three-dimensional competitive environment is to look at each security in three-time frames, starting with 60-minute, daily and weekly charts.
4 – Practice on the market trading online
It is time to give up your trading equity. Paper trading or virtual trading provides a perfect solution, enabling novices to follow real-time market behavior, make buying and selling decisions and form a theoretical performance record.
It usually involves the use of a stock market simulator that has the look and feel of the performance of an actual stock exchange. Use different holding periods and strategies to conduct a large number of transactions, and then analyze whether the results have obvious defects.
Investopedia has a free stock market game, and many brokers also allow customers to use their real currency input system for paper transactions. This has the added benefit of teaching software, so you won’t hit the wrong button when dealing with family funds.
5 – Other ways to learn and practice trading
Although experience is a good teacher, please do not forget to receive additional education when you are engaged in a trading career. Whether it’s online or face-to-face learning, the courses are beneficial, and you can find them at all levels, from novices (such as suggestions on how to analyze the above analysis diagrams) to professionals.
More professional seminars (usually held by professional traders) can provide valuable insights into the overall market and specific investment strategies. Most focus on specific types of assets, specific aspects of the market, or trading techniques. Some may be academic, while others are more like seminars where you can actively take up positions, test entry and exit strategies, and perform other exercises (usually using a simulator).
In-depth education in the financial markets, start your trading journey, then read the charts and observe the price trend, and develop strategies based on your observations.
While analyzing the results and making continuous adjustments, test these strategies through bill transactions. Then you will face currency risks, which will force you to solve trade management and market psychology issues, which is the first step in your journey.