An ultimate guide for beginner Traders

Hello there, fellow adventurous souls stepping into the exhilarating world of trading! Welcome to the ride of a lifetime, where ups and downs are as common as bad hair days! If you’re ready to embrace uncertainty with a dash of humor, then fasten your seatbelts because we’re about to take a laugh-filled journey into the chaotic world of trading.

Well, I am sure that you are now baring a lot of questions in mind that need to be solved to get started. So without giving you the pure advices, I am going solve the common questions what every trader will have at their beginning stage and thereby giving my advices indirectly.

This post is created for those people who have learned technical analysis and other basic and inevitable informations about the stock market trading. Only those people who are at the brink of their first trade can understand this post’s true essence. If you are just a complete beginner. First learn about markets and technical analysis. You can get the free course in marketnasium.com.

What kind of trading should I do as a beginner?

After getting a pure sense on stocks market trading, that is: after you have learned the complete technical analysis, It is certain that you will feel yourself to be on the top of the world. You will be confident enough to say that now you can harvest money easily.

But the reality here is that you are still a beginner! You have learned how to analyse better opportunities but you didn’t tried it out even for once in practice. Experience has a crucial role that is unavoidable. We all know that a man who have learned swimming from books will definitely drown when it comes to real water. Practice makes it perfect. And you may not get able to do as great as you wish in the beginning, but eventually you definitely do.

So starting with the very basic and less risky kind of trade is always the best option. As you are learning more from your trades, though the profits are lesser, you are acquiring the real experience that is more worthy than everything. I prefer you to start by swing trading. I did follow the same strategy when I was a beginner. Click here to learn better Swing trading strategies.

I’ve seen many beginners asking whether they could start by futures and options trading themselves. In my opinion it is a kind of reckless act. Futures and options trading is a rather complex and more risky trading derivatives. I am not demotivating, but pointing you the mistakes what many does. The heavy losses at the beginning would take all you confidence and you might end up like almost 90% of new (reckless) traders does.

I am not neglecting those geniuses who started and prospered from Complex and risky trades but I am exposing the majority’s case.

So your question would probably be : So when can I start F&O?

I am not going to answer this but your mind will. When you become confident in trading by practices, you will definitely get the answer yourself.

So start less risky. Aquire knowledge and confidence.

Can I day trade as a beginner?

Well if your are confident enough to take the heavy steps in front of you, you definitely can. Always remember your first trades are just the next stage of learning.

How much should I start with as a beginner?

I have already said in the previous session that starting small is a great idea as you want to make your first trades something for learning. Don’t take first trades for generating income but use it for gaining experience and knowledge which are way more important.

How to find better stocks to do trade?

There are more than 1800 stocks there in Newyork Stock exchange itself. You can do the trade on whatsoever company you like. But finding all your requirements on any stock for trading takes effort.

You can use any stock screener to filter stocks according to your requirements. There are alot of screeners available there in internet both premium and free. With these screeners you can filter stocks with certain given conditions like a certain candlestick formed this day, above 70 RSI, etc.

And also you can choose stocks to analyse by taking any indices and analysing the included stocks one by one.

Don’t put your money on any stocks blindly as you didn’t got any stocks according to your conditions and requirements, search for more stocks to analyse because there are a lot of stocks to play with (not just one or two).

Is it necessary to start with paper trading?

Paper trading is a risk-free way to trade securities without using real money. It is a great way to learn the ropes of trading and practice your strategies without putting your capital at risk.

Here are some of the benefits of paper trading:

Learn the basics of trading

Paper trading can help you learn the basics of trading, such as how to read charts, place orders, and manage risk.

Practice your strategies

You can practice your trading strategies without risking any money. This is a great way to test out new strategies and see how they work in the real world.

Identify your strengths and weaknesses.

Paper trading can help you identify your strengths and weaknesses as a trader. This can help you improve your trading skills and become more profitable.

Get a feel for the market

Paper trading can help you get a feel for the market and how it moves. This can be helpful when you start trading with real money.

Reduce your risk

Paper trading is a great way to reduce your risk when you start trading with real money. This is because you can practice your strategies and learn from your mistakes without losing any money.

Check your technical analysis

Paper trading gives you the proofs for what you have learned in technical analysis. You can check them and understand yourself the reliability and risks involved.

Some drawbacks of paper trading

Okay, it’s true that paper trading helps a lot. It is better to do paper trading before stepping to the actual trade just as a rehersal is needed to make your performance in the stage quiet more appreciable.

But what’s commonly seeing is that paper trading bores people and increases their appetite to run to the real market recklessly. By doing two or three paper trades, most certainly, you will be in a mental rush to do your first real-trade. Patience is important! Remember market is fed by human emotions. You are going to play with not just money but with your emotions. And strong emotions makes us blind though you are Jesus or Buddha!

On paper trading, you will get all the simulations that are very good to give an overall idea but it fails to give you the exact mental conditions. You would feel something different when you play with your own money rather than these virtual illusion. I can’t calculate the difference in intensity of urges, fear and greed that you will feel in both these scenarios.

Some other advices for new traders

If you are going to swing trade, never ever make your trade to an investment as it is always alluring to do. This not only makes the capital blockage but also can get you to a huge loss. Don’t hesitate to square off your position as your rational went wrong. Always try to hook with your strict rules.

Use, a maximum of only 5 or 6 technical indicators, more can make everything messy.

Try to find the exit points as you enter itself and hook with the plan.

As you increase your funds, always do diversification and not make it too much as well.

Don’t target buying exact tops and selling exact bottoms.

Don’t be shy to get to the trade. Be confident and only a confident giving stocks is what you want to choose.

Use the risk reward ratio.

Common mistakes done by new traders

Here I am going to list out some of the common mistakes done by new traders. Giving a little time to peek into this section helps you to stay away from the mistakes what almost 90% of people do.

  • Trading without a plan. This is one of the biggest mistakes that new traders make. Without a plan, you are more likely to make emotional decisions that lead to losses. Your trading plan should include your trading goals, your risk tolerance, and your trading strategy.
  • Trading too much, too soon. It is tempting to want to make a lot of money quickly, but this is a recipe for disaster. New traders should start small and gradually increase their trading size as they gain experience.
  • Emotional trading. This is another common mistake that new traders make. When you trade emotionally, you are more likely to make impulsive decisions that are not based on sound analysis. It is important to learn to control your emotions and trade rationally.
  • Not using stop-loss orders. A stop-loss order is an order to sell a security if it reaches a certain price. This is an important tool for managing risk and preventing losses.
  • Taking too big positions. New traders often make the mistake of taking too large positions. This can lead to big losses if the market moves against you. It is important to start with small positions and gradually increase your size as you gain experience.
  • Overleveraging. Leverage is a tool that can magnify your profits, but it can also magnify your losses. New traders should be careful not to use too much leverage, as this can put them at risk of losing more money than they can afford.
  • Revenge trading. This is the mistake of trading after a loss in an attempt to recoup your losses. This is a very risky strategy and it is usually not successful. It is important to take a break after a loss and come back to the market when you are calm and collected.
  • Not tracking your trades. It is important to track your trades so that you can learn from your mistakes and improve your trading performance. A trading journal is a good way to track your trades.
  • Not being patient. Trading is a long-term game. It takes time to learn and master the skills necessary to be successful. New traders should be patient and not expect to make a lot of money overnight.

By avoiding these mistakes, you can increase your chances of success in the markets.

Trading can be a profitable endeavor, but it is important to be prepared and to avoid making common mistakes. By following these tips, you can increase your chances of success.

My first trading experience

I was waiting to become 18 years old to get a trading account, from when I started learning about the markets. I learned the basic technical analysis and strategies so enthusiastically and like everyone, dreamt making profits with what I’ve learned.

But when it came to the very moment I was searching stocks to do my first swing trade, I became so nervous. I wanted to find a better opportunity according to the conditions I have learnt from the technical analysis. Although I analysed more than 50 stock charts, I couldn’t able to find that dream opportunity. For a blink of a second my mind got overtaken by the urge and I thought to do the first trade on any of the stock that sees next.

Well, for my own sake I wiped out that rushing though from my mind and started staying with descipline and patience.

At last I got one with a morning star signal at the support level of a trend line with supporting RSI along with MA crossover indicating my first trade. Ready to go!!!

Yeah, trading really requires mental power! I agreed! I reminded the words “Discipline is the key factor for a traders success” of someone I don’t know, again and again.

Well my first trade was not that much of a great profitable one in the case of real money, but in the case of knowledge it was a precious perl.

So I always say: first trades teaches you the best. You will be like a child staring at the infinite night sky. All of wonders and terrible emotions.

Be a controller of emotions and be perfectly disciplined.

Don’t ever desperate seeing today’s loss, the next day’s profit can wipe out that sin. And also failure teaches the best if you are willing to accept it.

Conclusion

In the exciting journey of becoming a trader, remember that every step you take, no matter how small, is a step toward your success. Embrace the learning process, stay patient through the ups and downs, and never underestimate the power of continuous improvement. As a beginner, you’re armed with knowledge, tools, and a passion for growth. So, go ahead and dive into the world of trading with confidence. Your dedication, combined with the insights from this ultimate guide, will pave the way for a promising and fulfilling trading career. Here’s to conquering challenges, reaping rewards, and becoming the trader you aspire to be. Now it’s time to conclude. Hope my advices and solutions helps. Happy trading!

SYAMRAJ MS

SYAMRAJ MS

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