On the way to making a stable income in the financial markets, newbie traders face two extremes:
a) First - you can learn a lot and for a long time, but you still can't go to real trading.
b) The second is to start without knowledge.
Both paths lead to failure. By the way, it is the traders who have lost funds from ignorance of the principles of trading, and mainly create a negative image of the financial markets. You can't make money without knowledge! And to separate the process of gaining knowledge from practice too.
Therefore, a beginner in the financial markets must both learn and practice.
2. Best instruments to trade for a newbie trader
Now forex brokers provide a wide range of financial instruments within one trading platform: currency pairs, CFD contracts on stocks, , cryptocurrencies, ( oil , gold , silver , etc.). It's easy for a beginner to get lost in this variety.
In order to facilitate the choice, study separately the features of the different types of markets.
3. Trading psychology: the third pillar of successful trading
An important factor to pay attention to when reading books for beginner traders is the ability to manage your own emotions. Trading is an amazing area. All your habits, behavior patterns, strengths and weaknesses of character are immediately reflected in the trading account and bring results in monetary terms. So you either earn or lose.
Newbie trader, faced with a storm of emotions in the process of trading, should know: he is not alone. Most traders experience the same feelings, and those who have been making money in this area for a long time have learned to turn them to their advantage. And we are ready to share tips.
4.What a beginner trader needs to know about money management
You already know that trading in financial markets is a high risk area. However, this risk is completely manageable, and if you know how to do it, you will be able to earn consistently.
In addition to a profitable trading strategy, a trader needs an understandable money management system and competent risk management. The safety of your account depends on them.
Here are the ingredients for a good money management system:
a) Stop loss. It must be set correctly, according to the requirements of the market and your trading strategy. It will allow you to reduce your risk if your prediction turns out to be wrong or out of date.
b) The ratio of risk and reward in each trading position. Usually trading strategies provide for it at a level of 1: 3 and higher. The minimum allowed ratio is 1: 2, only then the deal makes sense.
c)The of the trade entry. Along with a stop loss, it determines how much or a percentage of your trading account you risk on each trade.
d) Risk per position. Based on the mathematical expectation of a trading strategy, it is necessary to decide what percentage will be the maximum risk in each transaction. The smaller it is, the safer your trade.
5. Trading and life: how to organize your work
So, you have decided to start making money through trading. Motivating pictures with a trader who sits under a palm tree with a cocktail in his hands and spends an hour a day to check how profit is dripping into his account - this is clearly not about the start of a career. At the very beginning (and eventually too) you need to have an organized working day for trading.
1) Set aside time on weekdays that you will devote to trading.
2) Do not combine it with other activities: dinner, watching TV series, spending an evening with your family, etc. Trading requires extreme concentration.
3) If you are a beginner, take the study plan presented in this article, allocate the stages in time and systematically, without scattering, move along it to your first profit.
4) Before you start trading, do a market analysis every day.
P.S. Can you add more, wolves?🔥