Stock trading can be a nice skill to pick up. That isn’t to say that there aren’t going to be challenges to overcome. However just like all areas in life if you stick with it there is a great potential to make money.
However before you begin trading here are a few tips to help you.
1. Don’t Trade with Money You Need Today
Isn’t the goal to make money? Yes it is, but don’t trade with money that you will need right now. If you start to trade, make a bunch of mistakes and lose it all it would be nice to not end up in the homeless part of town. Aside from that it is harder to make money by trading with money you need to pay your bills in the next few months.
2. Don’t Let Your Losses Run Wild, Keep them Small
Anybody can make a lot of money on a single trade; it is not losing it on the next trade that is important. Always make sure that any losses you do have are small and have a minimum affect on your account. You can do this by using stop loss orders and position sizing.
3. Create a Method
You want to have some basics guidelines on what an entry signal looks like and what an exit signal looks like. Many new market participants don’t have this and as a result they lose money when they try to trade short term.
4. Make Your Own Decisions
It is easy to get swept up in market noise. That is one of the reasons I don’t watch the news. Don’t get caught up in other people’s opinions no matter how qualified they might seem to be to talk about it. There are too many scams and ignorant people out there to believe everything you hear.
Instead work on creating your own trading plan and making your own decisions. In the long run this is the only way to succeed.