Learn to trade: Trader training resources to take advantage of
You’re not going to have success trading on the stock market unless you put time and effort into learning how the market works. While it’s possible to enjoy big returns- even make a living- by investing in the stock market, making money on the market is like any other lucrative money-making venture in that it takes hard work and discipline.
Get started off on the right foot with your stock market investing by going through the following five steps so that you know the ropes before you put your money on the line.
Get a good mentor
The best source of information for someone who’s just starting out is an expert in trading who’s done it all before. If you know someone who trades and who has already had success with trading, it’s a good idea to ask them for advice. You’ll probably find that having a good mentor puts you way ahead of the game. Although there are many informational resources out there, it’s hard to know where to get started trading. A mentor can help you enjoy success early on and take some of the risk out of being a newbie investor.
Do some reading
There’s so much literature out there on trading that it can be hard to know which publications are worth your time. Get started with some highly praised investment guides including Stock Market Wizards by Jack D. Schwager, Technical Analysis of the Financial Markets by John Murphy, and The Nature of Risk by Justin Mamus.
Watch Bloomberg news and subscribe to the Wall Street Journal
Putting Bloomberg news on in the background when you’re engaged in everyday tasks that don’t require complete concentration is a good idea. Bloomberg news is news that’s tailored to investors.
Successful investing requires you to be informed and know what’s happening with the companies you have invested in or you are considering investing in. A company’s prospects can change quickly, so compulsively and constantly watching the news is important for investment success.
Use a simulator
Simulated trading is a great way to learn the ins and outs of investing before you’re actually risking your money. There are numerous trading sites and educational sites out there that offer simulated trading platforms. Find one and give it a whirl. Then, you can actually start investing once you gain some confidence and experience.
Learn how to read price charts
Price charts are a vital tool to the investor. Of course, they’re not necessarily simple to understand for the uninitiated. Price charts track how the value of a stock has varied over a given period. The most basic type of chart used in technical analysis for trading is the line chart. However, bar charts, candlestick charts, and point and figure charts can also be important in predicting stock behavior. Learn how traders use all these information sources to their advantage as part of your preparation for trading.
Study up on risk management
Once you’ve got your money invested in a stock, you need to know how low it can go before you need to back out and cut your losses. This requires you to understand risk management and how risk is shown by stock behaviors.