STOCK TRADING: 6 TIPS FOR BEGINNERS
Trading in stocks has certain rules. These trading rules you must follow because they turn a game that seems unpredictable and ever-changing into a job that is highly predictable and capable of generating profits for you every week.
There is so much misinformation and outright lies about stock trading on the Internet right now that when I meet people taking their first steps in trading who follow such advice, I get nervous.
If this is you – congratulations! Congratulations on breaking through a lot of unnecessary information and trusting yourself enough to follow the wealth of generations with a trading strategy that promises you real profit potential (not the 8-10% per year that many financial advisors advise you to aim for. ).
During my work in the stock market, I have learned a few things, and I will share these lessons with you in this material.
Use them to shorten the learning curve and waste your potential.
TIP # 1. REMOVE YOUR PINK GLASSES
Stock trading promoters are ready to quickly sell you stories of companies that are ready to explode and change the world with their products.
Is this the only problem? These stories are full of nonsense.
99% of companies that trade cheap stocks ultimately fail and the chances of you hitting the 1% of those with long-term growth are very slim.
So stop believing everything you hear and acknowledge the realities of intraday stock trading. Some stocks may be worth little, but that doesn't mean you can't use them to make a profit.
TIP # 2. ADJUST YOUR EXPECTATIONS FOR PROFIT
Another type of scam you'll hear from stock trading promoters has to do with how quickly your earnings can grow. Yes, it is possible that the price of small shares will rise from $ 1 to $ 10 per share, and it is possible that you will double or even triple your money in one go.
But do you know how much I'm trying to make on such a deal? Only at $ 0.50- $ 0.75 per share.
Of course, I am happy if I make a little more money, but by keeping my trade sizes small – opening and closing positions when I know the numbers are correct – I protect myself from the catastrophe of risk and major losses that many traders endure.
If you are constantly chasing big wins, you will force the conclusion of deals that really do not exist. And these are the kinds of mistakes that will take you out of the game before you get a chance.
TIP # 3. RESPECT THE RISK
Part of the reason I keep my gains and my losses low is that I respect to risk.
Many students know that I quickly close a position by “taking profits” or “stopping losses”, but this is normal for me.
A stock market that you think is going up can crash in a matter of minutes. A market in which you are confident that a bearish trade is correct can change its course in the blink of an eye.
Make sure you never set aside too much of your investment portfolio for every single trade (% of the amount is different for everyone, depending on which you trust more), and make sure that the position you open is not that big to influence the behavior of the stock price. Always watch for good liquidity – ideally, at least a few hundred thousand shares bought and sold daily – acceptable trading volume. This will ensure that you can enter and exit the market when you need to and when you want.
TIP # 4. MAINTAIN A TRADING JOURNAL
As a novice trader, the best thing you can do for yourself is to create a trading journal that will cover everything you do in the market, the size of the positions you open, whether you are making a profit or losing trade. A diary-like will tell you a lot about trading and about yourself, it is an invaluable resource that you can use if you want to become a consistently profitable trader.
Better traders are methodical. They don't trade on a whim – they take a close look at their past actions and use that experience to make their future trades better … Both of my first students to top-performing trading have lots of spreadsheets!
Knowing your past trades can be incredibly helpful when it comes to improving your intraday stock trading abilities. And if you want to benefit from this, you must track them from the beginning.
Either way, make a commitment to maintaining and updating your trading journal every time you trade in the stock market.
TIP # 5. TAKE CARE OF YOURSELF
Many traders are so deeply involved in stock trading and trading training that they forget about their health.
You really have nothing in this world if you have no health!
And when you watch stock charts all day and research all night, it's quite difficult to remember to wake up, prepare healthy meals, and do some exercise.
But guys, this is very important. You will be a better trader if you are healthy. You can stay in this area longer if you take care of yourself.
Break bad habits now. Don't wait to make your health a priority – focus on it now that you are just starting out as a trader to support you throughout your career.
TIP # 6. INVEST IN YOUR EDUCATION
Many traders are insolent when they first start trading on the stock exchange. They act as if they know everything there is to know about trading on the stock exchange.
Of course, many successful traders have come a long way after learning a lot about trading before becoming successful in the stock market.
This is why I make education an important priority, and I recommend that you do the same. Find people who have achieved everything you want to achieve in your life and learn from them everything you can to become an even stronger and better-informed trader.
However, only 5-10% of traders have stable profits. Ignore what “dubious” traders say in chat rooms, on internet forums, and on “trader's social networks.”
Of course, 99% of traders will tell you that they are making money – especially if they are trying to sell you something.
Your time is valuable enough, and the amount of money you can spend on information products is limited enough to work with someone who isn't 100% honest with you.