Below, I detail some of the steps needed to begin your journey toward becoming a trader.
1. Make a resolution to learn. Action follows intention, so take your first step toward trading by making a resolution to learn how to trade stocks. Don’t gloss over this step or take it lightly. Take the time to consider why you want to learn about the stock market and what you hope to gain from it. Mentally prepare yourself for the work and study ahead. This sets your foundation for learning about trading and will help you in setting goals at a later date.
2. Do your research. Now that you’ve made a decision that you want to get into the stock market, it’s time to figure out how to go about it. Rarely will it be a good idea to just jump in there and start trading, with no knowledge and no preparation of any kind. If you do that, what will likely happen is that you’ll lose money, get discouraged and quit, before you’ve even given yourself a chance to truly succeed.
3. Get in “back to school” mode. Once you’ve found some resources, set yourself to the task of learning. Learn all that you can about the market. Be obsessive about learning. Put aside specific blocks of time, on a daily basis, to learn about the market and dedicate yourself to your learning program. Hold yourself accountable and be strict about sticking to your regime.
4. Set goals. Remember how I earlier alluded to taking a few moments to consider your motivation for getting into the market? Now that you’ve started to learn, it’s a good time to really get clarity on your goals.
Set specific goals for what you hope to attain by becoming a trader. Is it buying a big house by the water or purchasing your girlfriend’s dream engagement ring? The more specific your goals, the better. They will serve you as you start trading and they will help keep you inspired. You can always adjust these goals, based on your progress. But, it’s not only useful, but CRUCIAL to aim high, so that “big goal” will continually motivate you throughout the difficult, but necessary study/preparation period.
5. Seek guidance. One of the best ways to streamline your learning is to seek out a mentor. This can be anyone who is further along in their trading career than you. Often, this individual will not only offer valuable insight, based on their own experiences, but can also guide you toward other resources that were helpful to them. In essence, they can help shed light on the path ahead and assist you in avoiding common pitfalls, thus speeding up your learning curve dramatically.
6. Start trading. So, you’ve learned the basics, you’ve held yourself accountable and you have good guidance. At a certain point, it’s time to get out of the nest and start flying. Start small with your trading. Research trades that will offer the most minimal risk and see how it feels to even pull the trigger. Maybe you’ll lose some money, maybe you’ll make some. Either way, it will give you valuable feedback for moving forward and you must learn to grow your KNOWLEDGE account before you can consistently grow your bank account.
7. Evaluate your progress. As you start to trade, take the time to pause and see what is going right and what is going wrong. Both aspects are equally important.
For example, if you’re doing something right, then definitely make note of it, so that you can continue doing it, focus more on it and maintain an upward trajectory. How could you keep doing the things that are going well, but streamline your process? Refining your technique will help you repeat your successes quicker, in the future.
On the other hand, if you’re doing something wrong, consider that just as strongly. How could you eliminate your “wrong” behaviors moving forward or conduct yourself differently in the future? How could you eliminate bad habits, so that they won’t hold you back?
8. Cultivate good habits. Millionaires come in all shapes and sizes, but many of their good habits remain constant, across the board, no matter who they are. Take the time to cultivate these habits. You might start small, by waking up a little earlier each day. But, ultimately, you want to refine all of these millionaire habits, including good saving habits, developing the ability to self-reflect, redefining your definition of failure and maintaining a strong commitment to giving back to your community.
It’s important, during your growth as a beginner trader, to practice good habits, such as cutting losses quickly to minimize the risk of a potentially large disaster, even if small losses are frustrating to take.
9. Banish bad habits. Just as you want to discover and emulate the good habits of successful people, you want to banish the bad habits that might be holding you back. Maybe you’re held back by a fear of failure or you aren’t dedicated enough to learning. Be honest with yourself about your shortcomings and strive to improve yourself on a daily basis.
Persistence pays off, when it comes to trading stocks. So does diligence. By staying connected to your goals and by sticking to your trading, through the good times and the bad, you’ll create an inner fire and passion for the process that will make you a trader for life. And, that is truly the key for long lasting success and happiness: a deep passion and connection to what you are doing. Enjoy the journey.