Stock trading is one of the easiest ways to make money. Thousands of traders are using a leverage trading account and making a consistent profit with a small investment. They know the proper way to use leverage. But considering the bigger picture, most stock traders are losing money. More than 90% of retail stock traders are losing money. The majority of them jump into retail trading business without having any skills. They take random guesses about this market and try to make big profits. As a result of this, they blow up their trading account within a few months.
This article is specially written for new stock traders. We will teach you how to learn stock trading in a few easy steps. Go through this article to change your life.
Step 1, learn the basics
In the first step, you should spend at least 2 months learning the basics of the stock trading industry. By learning more, you will have a better idea of this market. In most cases, the rookies don’t have enough patience to learn the basics. They quickly skip the learning session and start focusing on profit-taking the opportunity. By doing so, they impose a great risk to their career. So, be determined and stop thinking about the big profit or successful traders for the first month. In the second month, go through the technical terms and read the stories of the successful traders. Soon you will realize the importance of knowledge.
Step 2, Open a demo account
Opening a demo account is the most important step for retail traders. But you must visit the reputed broker website to get the best demo account. If you choose to trade with the low graded broker, you are not going to get the advanced tools. Once you start trying to learn stock trading in a low-quality environment, your price feed will not be accurate. Most importantly, a low-grade broker never helps you to learn to trade.
The successful traders always ask the rookies to trade with Saxo since they offer free educational resources. By using their educational resources you can learn lots of new things about the stock trading business. Once you feel comfortable, it’s time to develop your trading strategy.
Step 3, Development of your trading strategy
Developing your trading strategy requires some time. But this is one of the most important aspects of learning the stock trading business. Open a demo account and try to create a simple strategy. In the demo account, you might have to lose a few trades in a row but this is perfect. Find the faults in your trading method and try to learn from the mistakes. Once you become skilled at trading in the demo account, you can start to trade the real market. Make sure you have back-tested the trading method vigorously.
If you are not sure how to create the perfect trading method, you can ask for help from the professional traders. The professional traders can give you the guideline to deal with the market dynamics. Once you take tips from the professional, you will be able to make a big profit without taking too much risk.
Step 4, revise your risk management plan
You have to revise your risk management plan to become a profitable trader. Being a new stock trader, you should risk more than a 2% risk. Once you become good at managing the risk, you can take a high risk by using a tight stop. But this doesn’t mean you will be exceeding 5% risk in any trade. Elite traders often trade the market with an aggressive plan to earn more money. Though it’s a very efficient way to boost the profit, you can learn this technique by using the technique. Take smart steps to protect your capital. Never become aggressive to earn huge profits from this market. Last but not least, have faith in your trading method.