5 Tips for New Traders
So often when people hear I trade the Stock Market, they say “that’s risky”, or “that sounds very hard” and I can understand why. To an outsider the Stock Market can appear to be a big scary place, where you can lose all of your money in the blink of an eye- and, this is true if you don’t know what you are doing.
I have been trading the markets for over 10 years now, however it has been a long journey and one which is constantly making me learn and grow each day. After leaving school in grade 9, I began work cleaning and continued this for the next 10 years. After hearing about the Stock Market through a friend, I was instantly drawn to trading.
I immediately immersed myself in learning everything I could, studying and learning with experts and brokers. I followed their wins, their losses, examined their mistakes and their strategies. It was one of the most exciting times in my life.
For 11 years now I have been trading the Markets.. have I lost money on trades? Yes, of course, but what most people don’t know, is that like anything in life, you must learn the rules and processes, or strategies as we say before jumping in- you can choose a strategy according to your level of risk and minimize losses by learning how to protect yourself.
5 Tips for new traders..
1) Get Educated. I cringe when I hear of people who have put their money on the line without getting educated first. As they say ” pay for education or pay with pain”..and I have found this motto to be true time and time again. It is so important to learn what you are doing. You wouldn’t take a boat out into the ocean if you didn’t know how to drive it? or better yet without life jackets on board? So why risk your hard-earned money without 100% certainty in the decisions you are making. I have spend thousands of dollars, and countless hours learning from expert traders and brokers for over 10 years now, and to this day I am still constantly learning! One of the best decision I made was to travel to the US and complete a trading course. I also spent 4 weeks with an office of brokers and followed what they were doing. As there was nothing like this in Australia at the time, a few years later, with too many friends asking me to teach them how to trade, I began teaching and sharing my experience with others. Whoever you decide to learn through, I certainly recommend this is a vital part of becoming an expert trader and effective money management.
2) Know your risk level and find your trading style . There is no point trading CFD’s if just the thought of it gives you nightmares. Each person has an independent level of risk that they feel comfortable with, and this is an important part of determining your trading personality. Find out what sort of trader you are? Do you want to day trade options? Or hold long-term leaps? What sort of time do you want to commit? Do you want to trade full time or part time? Ensuring you diversify your portfolio accordingly is critical.
3) Have realistic expectations When setting goals for anything, it’s important to be realistic. You want to set the bar high enough that you’re challenged to meet them, but not so high that they seem unattainable. Setting reasonable goals will keep you motivated and won’t have you feeling “behind” if you don’t meet your objective.With a portfolio of $5,000 you can’t expect to turn it into $100,000 in a year trading Stocks alone. Also, don’t be fooled into thinking that trading doesn’t take time- it does, especially in the beginning. You simply cannot expect to spend 5 minutes a day and walk away straight off the bat. The bottom line is that it t is your money and you need to put the effort in and take responsibility.
4) Paper Trade.. this one is probably one of the most critical steps in starting out at a trader. While you might be eager to rush in and make money, if you can’t master it on paper than why risk it?
4) Keep a Trading Journal- Mental stops tend to get blown. Writing your trading plan motivates you to uphold your commitment. It will greatly increase your odds of reaching the goals you’ve set. Measuring your progress will keep you on your toes to alert you of possible needs to adapt your strategy. You may want to do a weekly review of your progress, with more intensive check-ups monthly and quarterly.
5) Pay attention to your emotions. Mastering your emotions is one of the most difficult parts of trading. And most of the time you don’t even know it is affecting you. Most people say ‘Trade without emotion” or get rid of fear and greed. But in actual fact emotions are always going to be there, and you need to learn to deal with each one as it comes up. First, recognising the emotional states you are going through is important, write down what you are experiencing and why. If you find an emotional state such as excitement, or fear, is causing you to deviate from your trading plan, then you need to stop and take a breath before you jump in. For more articles on Trading Psychology go to: http://www.learntotradeshares.com/category/trading-psychology/
It is my passion now to share my knowledge and experience with others. Through my company Stock Course I run weekly coaching webinars and market updates, so I can teach others to trade from the comfort of my own home in Sydney Australia.
If you have a question about trading, you can email me at lyn.summers@stockcourse-team.net, you can also get a copy of my E-Book at http://www.stockcourse.net/welcome
Thanks for reading,
Lyn Summers
