Everyone knows that financial trading can be an exciting and (potentially) lucrative venture. It is a popular and interesting topic for those looking to make money. However, diving headfirst into the world of trading without the proper knowledge can be risky. For someone like me, i.e. an absolute beginner, it is essential to understand the basics and develop a solid foundation before starting to plan an investment or trading strategy. I have decided to share my journey with others, hoping as I learn more by writing about my experience along the way, that this may help other beginners learn how to learn the skills required to be a successful financial trader, and perhaps avoid the mistakes I will no doubt make!
When I read financial trading guides online, I generally see the same sort of tips repeated on multiple websites, for example
- Educate Yourself
- Set Clear Goals
- Choose the Right Broker
- Start Small
- Practice with a Demo Account
- Develop a Trading Plan
- Manage Risk
- Stay Informed
- Seek Guidance
- Stay Disciplined
I am sure these tips are correct, but I don’t find them very helpful. In fact, they leave me with more questions than answers, such as:
- How do I learn about financial trading? Can I teach myself to trade? How do I become a trader with no experience? Are trading courses worth it?
- What are the best and most trustworthy resources? What is the most trusted trading platform?
- How do I set goals as a beginner, what would be some examples of good trading goals for a novice? What is the best trading strategy for beginners?
- Do I really need a broker? What for? How much do they charge?
- What does starting small mean in practice, how small?
- Are demo accounts really useful or do they just give a false sense of confidence when you know you cannot lose any money? How long should I trade with demo account?
- Where do I get a demo account? What should I look for when choosing a demo account?
- How do I create a trading plan? How do I know if my trading plan is any good? What are the characteristics of a good trading plan?
- How do I manage risk? How much risk is acceptable to start? How will I know my risk limits, how much is too much?
- What is the safest trading method?
- I have heard that 90% of traders lose money, is this true? Why do most people lose money trading, what mistakes do they make and how can I avoid them?
I have many more questions and I’m sure you do too. I will try and answer these and other questions as they arise during my journey. But let’s start at the beginning, what exactly is financial trading?