Knowledge and skills are the key factors of success in all human activities. Trading is no exception. Before concluding any serious deals, a novice trader must gain extensive theoretical knowledge about markets, macroeconomics, and trading indicators. A newcomer must also learn funding traders rules and understand how to make decisions correctly to maintain trading discipline.
What personal skills does a trader need?
Stock trading is an extremely knowledge-demanding and skill-intensive job. Success in this field largely depends on experience and one’s ability to learn and to constantly get better. Therefore, for a novice trader to master the trade, the focus should be placed on acquiring the following set of key capabilities and skills:
- Rationalism. Traders should always be able to explain why they made a particular transaction. They must have a logical reason for this, based on data, knowledge, and strategy, but not intuition.
- Ability to make quick decisions. A trader not only needs to understand the theory of trading on the stock exchange, but also quickly make decisions about opening and closing a position when a non-trivial situation arises.
- Stress resistance. A trader must learn not to be upset by the loss of some amount, but to be able to put up with it. A trader needs to perceive every mistake as an opportunity for improvement and digest this experience to develop and move on.
- Discipline. During the working day, a trader must stay focused and keep a keen eye on time flow. However, oftentimes, the trader’s work continues even after trading closes.
A novice trader should analyze the transactions made before the opening of the next trading day and, if necessary, adjust their strategy for tomorrow.
Where to begin your trading learning
The good news is that you can study trading theory independently and for free. Many reputable brokerage companies and trading platforms publish free basic courses for beginner traders, which can help you master the terminology and basics of market analysis.
Also, brokers, stock exchanges, and some trading platforms offer free courses on trading theory. For your understanding, such courses may include concrete examples (success stories) from the practice of trading on the stock exchange.
Another way to learn trading theory is to read publications, news, and other information on specialized websites, magazines, and books.
To achieve results, a novice trader must also learn to set goals. According to FX2 Funding, it is worth setting goals for short periods of time, for example, within one trading week, and for small percentage changes in quotes. Only when the trader gains confidence in their abilities, these parameters can be gradually expanded to encompass mid and long-term planning.
What will not help you learn trading?
Just as with any intelligent activity, there are certain limitations and boundaries in learning to trade, and crossing those can lead to the opposite effect. If you want to master trading, don’t make the following mistakes:
- don’t blindly copy other traders’ strategies;
- do not change your strategy too often (except the cases where the strategy systematically brings negative results);
- don’t try to make a lot of money with high leverage, as you could lose everything in one trade deal;
- don’t buy courses from trading instructors who refuse to show their brokerage reports.
In addition, you should not blindly trust information from dubious sources, take other traders’ words for granted, or frequently change trading markets.
A few words to wrap up
In trading, learning and gaining experience should be every newcomer’s priority.
Your primary goal should be to learn the basics of trading and master technical and fundamental financial analysis. For some people, a trading mentor is a must, while for others, the patterns and stereotypes of mentors may become an unexpected barrier to progressing in trading.
You should also learn to set clear goals and objectives and develop a trading plan. A good idea is to start calculating financial risks, which will be your “companions” throughout your trading practice.
Lastly, as you gain initial experience and reinforce it with new knowledge, you should keep a trader’s diary with all your past transactions and calculation
