Too many traders enter the markets with the get rich quick scheme, the delusion that trading is an easy way to make money, or too lazy to put in the effort it will take which is measured in years to be successful not hours. New traders need to focus completely on surviving that first year of trading not going big to get rich. With the chips of slippage, commission fees, and even taxes stacked against the trader this is a serious endeavor. A lot of trading is also done against algos, professionals, and traders that have been trading for decades so be better have an edge and use it with discipline so they do not take your money. Your profits have to come from out trading others, you have to beat the traders that did not do their homework. With 90% of traders typically not even surviving here is my advice to join the 10% of consistently profitable traders.
- Spend at least a year learning how to trade before you ever take that first trade in real money.
- Find online resources, books, and real traders to get some insights on what you need to study to learn to trade.
- Learn about technical indicators like price action, moving averages, support and resistance, trends, RSI, etc.
- Study historical price action on charts and learn how to back test ideas.
- When you start to trade, trade small enough so the out come will matter but not engage your emotions or ego and affect your judgement.
- Fully understand the mathematics of over coming draw downs and the risk of ruin so you do not blow up your account in that first year.
- Develop a robust trading methodology first, then you can trade.
- Do not start trading until you have a written trading plan quantifying entries and exits along with position sizing.
- Your goal can not be to trade for a living at first, your first goal is to trade profitably, then you will need multiple six figures to even considering trading for a living.
- You have to love trading to create the energy to be able to do the work it takes to break through to success. You will not see results or it being worth the trouble until much later than when you begin.
Source: By Stephen Burns - www.newtraderu.com
