Quick Step Guide to start trading

Lots of people have been asking me how to get started in trading. If I had to summarize a quick step guide it would be as follows:

1.?????Learn the basics

Understand what trading is and the elementary concepts around this activity.

2.?????Be proficient in technical analysis

You must be able to read candle stick charts, and this is not an option.

I paid for a trading course but if you make a quick research on YouTube you can find several tutorial, webinars, lessons and dissertations about trading. I will not suggest any particular channel because one of the things I’ve learned is that you should be open to different perspectives and theories. Each experienced trader has a particular methodology for looking at data and you should listen to a variety of investors to understand the style that better suits your personal characteristics and skills.

3.?????Define your goals and strategy

Once you are comfortable with chart analysis (and for that you must practice a lot) you must decide if you want to start trading just to obtain a higher profitability from your money than the one you get from saving it in the bank or if you need to earn money to pay your bills. For the first option 5% profit in a year can be awesome for the second you might need a 5% week profitability to consider trading as an interesting activity.

There are ads that promise you can become a millionaire with a 100€ investment but I trust you are mature enough to recognise bulshit and that your common sense will help you realize that If you only invest a few euros you cannot expect to receive thousands in return.?

4.?????Choose a broker and open a demo account

There are several platforms and almost all have demo accounts where you can practice. I will not suggest any particular broker because again, if you make a quick search, you will have a notion of those that are more reliable.

A demo account is the best way to test your knowledge and your ability to forecast price moves. My suggestion is that you stay in the demo account the time needed to gain confidence and understand your relation with risk.?

5.?????Create a trading journal

This is the best way for you to understand if your strategy fits your goals.

A trading journal is an Excel spreadsheet where you register the assets you invest in, the price of entry, your price target and the final result whether it’s a take profit or a stop loss.

This journal is also important for you to acknowledge the net income you can realistically attain. Be prepared to lose money along the learning process and even as you become more experienced. Markets can have a higher volatility and unexpected events can induce reverse movements you didn’t anticipate.

6.?????Be disciplined

If you have a regular job and want to start trading you should be more careful with your investment options. Unexpected price moves can occur when you are in a meeting and you will not be able to close the deal and control your loss. You can access any platform in your phone but charts are harder to read on a small surface and your perception can deceive you. You have to establish a period of the day when you can check the markets properly and be attentive to open hours.

If you are choosing trading as your main activity you must have a work discipline – deciding at what time you will you start working and when you will shut down – but you must also be aware that if you spend consecutive hours looking at charts you might become too anxious with price movements and make impulsive decisions that will cost you money and sanity.

One very important thing you should be aware is that trading is not gambling.

If you want to be a professional, you must study and practice. If it took you at least 3 years to complete your college degree if you manage to be a trader in 1 year you are already progressing at a fast pace.

The other very important thing you must be conscious is that you will lose money.

The same way you can lose money if you open a restaurant or decide to import gadgets from China and sell them online. Trading is a risky business and the only thing you can learn is how to control your emotions when your predictions fail.