How to become a trader

How to become a trader/investor:

 

Paper trading:

Paper trading is one of the best ways to get a feel about stocks price movements without risking any real money.   Paper trading is a simulated trading process in which would-be investors can ‘practice’ investing without committing real money. This is done by the manipulation of imaginary money and investment positions that behave in a manner similar to the real markets.

Read books:

 One of the best ways to start learning is by reading books to understand the big picture also by going over lots of the free materials in our websites specially live trade analysis posts and premium coaching videos can teach you all the basics and advance topics in a short period of time. Most of our courses are produced from real trade examples from the last two years. Our courses are focused in way that we show you the big picture from every angle to open up your mind to make successful in stocks markets in the long run. One of my favourite book is “How to make money in the stocks” by William O”Neil. It combines fundamental and technical analysis and is a good guide for new investors.

Find a mentor :

A mentor could be a family member, a friend, a past or current professor, co-worker, or any individual that has a deep understanding of fundamental and technical analysis of the stocks and markets. A good mentor can reduce your learning curve time by sharing his past experiences with you so that you can focus on the most important aspects of the trading.  It is important that your mentor can confidently explain you his method and be an active trader/investor. If your mentor can not clearly show you that his method works in the real life trading then you have to be suspicious about that mentor or guru. A confident mentor should be able to answer any of your questions and share his trade set ups with you so that you learn with confidence. All successful investors of the past and present have had mentors during their early days. If you need a mentor you can email us and one of our coaches can help you in advancing your learning and set up a trading account.

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Study the Greats:

Learning from the greatest traders in the history allows you to understand their perspectives and logic behind their success and losses. Their philosophies can be inspiring and educational. Greatest investors include Warren Buffet, George Soros, Jesse Livermore, Benjamin Graham, Peter lynch and Paul Tudor Jones among many others. One of the quotes of Jesse Livermore holds true even today “Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”- Jesse Livermore

Reading   Articles and watch TV:

Traders can read articles and tv to familiarize with trading terms and topics. It is so important that you question the source as these days anyone can write any article and make videos to show you they are the next guru or making money every day. You always need to go back and check past history of the author. It is so easy for people to share their bias and ignore many other important aspects as they doing their analysis. Whatever you see on tv might not give you much edge as everyone is watching that news and big institutional often have most of the analysis and news in advance.  Regarding Financial TVs’, you might find them interesting at the beginning but eventually you may see that a lot of the investing shows on TV are more of a distraction. Many of their recommendations can be biased and manipulative. You need sound knowledge to block the noise and make best investment decisions.

Read and follow the market

Most popular news sites are  Yahoo Finance and Google Finance , Bloomberg and Wall street Journal . It is important to not randomly make investing decision based on a positive or negative news article. Many headlines may look important or scary, but it takes time to learn how the news can have an an impact on your portfolio on the short term or  long run.

Learning fundamental & technical analysis:

Fundamental analysis is a method of evaluating a security (stock, bond, note) by investigating the intrinsic (fundamental) value of the business that issued the security.  Examples of factors considered in fundamental analysis include earnings growth, sales, revenues market share, debt, cash flow and quality of the management,  all reflected in the financial statements and together called “fundamental information” are the true indicators of its earning potential and future  value of its securities . Fundamental analysts recommend buying stocks in companies with strong fundamentals because they are essential for long-term success and stability. It is used by traders to make decisions on different assets by measuring the economic, financial and market conditions that can affect its price. In contrast, Technical analysis is a means of examining and predicting price movements in the financial markets based on an asset’s chart history. , Technical analysis focus on the past and present movements in the market price of a security to estimate its future value.  Popular technical analysis indicators are MACD, RSI, Bollinger band, moving averages ,trend line  analysis, pivot levels and Fibonacci retracement.

Passive Index and follow Warren Buffett:

For the majority, trading is challenging and can be a losing proposition if don’t you put enough time in your education to find your edge. Warren Buffett, the greatest investor of all-time, recommends individual investors’ simply passive index instead of trying to beat the market trading on their own. Passive management (also called passive investing) is an investing strategy that tracks a market-weighted index ($SPY) or portfolio.

Open a stock broker account

Find a good online stock broker and open an account.  The best way to learn about it is through a demo account . There are a few important things to consider when you are choosing a broker such as trading tools, account minimum, commission fees, investment options, account types and International trading. Most popular brokers are Robin hood, TD Ameritrade, Interactive brokers, Charles Schwab and Fidelity. Stockbrokers.com is a great website to compare between top brokers.

Consider paid subscriptions

Sometimes you can learn from thinking process of the professionals and their analysis. At first you should follow them on YouTube or social media. If you see that their free analysis are making sense and playing out in the reality then paying for research and analysis can be both educational and useful. One thing you need to be careful is that any paid subscriptions come from independent traders and services that claim to have fantastic returns and can “teach” you how to be successful. If they are showing you or highlighting all the winners in the social media or in their site testimonials then it can be a scam. We can help you with our research and analysis,please visit our services page.