Trading isn’t just a daily activity to generate income. It is truly a lifestyle that will teach you good habits for your life regarding managing negative emotions and lifelong learning.
Practice
Look for an online stock broker program that offers trading simulators. Use these simulators to become familiar with the program and its tools. They will also allow you to trade using fake money which will help you get a handle on the tools. You can usually set a starting cash value similar to what you plan to save up for to begin trading. These simulators use real-time stock market values.
Mentorship
Ask around to see if anyone you know trades in the market. Make sure they are willing to answer questions and provide helpful resources. If you can’t seem to find a mentor to keep up an open discourse about the market, turn to a forum. Forums can be extremely helpful when asking a specific technical question but don’t follow any trading advice. The people on forums usually are not financial professionals.
Study
Look to the past and study up on successful traders. Not only is the history of trading incredibly interesting, but past successful investors had methodologies and mindsets that are still valuable today. Do some research on past successful investors and find a book that speaks to you. You can either choose physical, digital or audiobook depending on your preference. Audiobooks are a great option if you do a lot of driving.
Research
The master is a lifelong student. Take time every day to research market trends on credible websites. Watch the stock market news on TV in the morning. Take note of the overall trends in the market. If you come across a term you are unfamiliar with, take the time to look it up and understand its context. A great indicator to keep an eye on is the RSI indicator which measures whether a stock is being rapidly bought or sold.
Minimize Losses
When making your first real-money trade, keep your goals realistic and small. Try to follow just one or two stocks closely. Take a look at purchasing fractional shares of big-dollar stocks like Apple or Microsoft. Use limit orders to guarantee the price to buy or sell at. This will guarantee your price but not the time of execution. Not every order will be profitable, but if you are “winning” more than “losing” your end goal will be net profit.
Stay Cool
Check your emotions at the door when going into day trading. The market is unpredictable and sometimes volatile. Even with the best strategies, you will still be surprised. If you find your emotions creeping in, take a ten-minute break to meditate or do something you enjoy. Hope and fear are natural and human, but they will affect your ability to trade objectively.
These are habits that will help you up your trading game. Moreover, if these habits are integrated into your daily life it will become even easier to use them while trading on the market. You will find it easier to process difficult decisions, set realistic goals, and process new information. Trading isn’t just an activity, it is a lifestyle and with the proper mindset it will improve your overall focus in life.
