Successful trading takes time, that’s the first thing you need to know. Strategies, modalities, assets, everything can vary. What is certain that you cannot fail to become a successful trader is to follow these seven steps.
In my career as a trader and teacher, there is one idea that always sticks with me: there is no one way to become a successful trader, but these six steps are the ones you can’t ignore to get there. to arrive at.
Step 1: Never stop learning
Start with the most basic concepts of technical and fundamental analysis. There is a lot of information on the internet, look for reliable sources that help you understand the theory.
You will surely not like all types of trading, but you will find concepts related to you that can help you define your strategy.
Second step: Determine if this type of investment is for you
In addition to deciding if this way of investing corresponds to your investor profile and the level of risk with which you feel comfortable. You must ask yourself if you have the capacity to develop patience, order and the ability to assimilate all the financial and economic concepts that you will use on a daily basis.
Investigate, analyze, get inspired by reading related books or watching movies. Give yourself time, without haste, but without pause.
Third step: Take the time and think long term
Develop a study methodology and be consistent with it. You can spend one or two hours a day reading information related to trading strategies, learning how to do technical analysis. Before practicing, compare concepts, review testimonials, and take online courses.
By reading this newsletter, you are already taking a step in this direction, which will lead you to become a successful trader.
Always be clear that every day you will take a step forward.
Defining the right strategy for you can take time, so don’t focus on the short term or think it will be a quick way out of a bad financial situation.
If you already know that you are passionate about trading, don’t stop looking for information. Discover all the concepts, measures, steps and procedures of other traders.
You started a long career
Fourth step: Train yourself, take risks with very small amounts
When you feel calm and ready, buy a trading platform and practice on free demo accounts. If you wish, you can also open a real account and start with small amounts of money.
The strategy is not to make it grow quickly but slowly but surely. First, keep a journal or record why your strategy worked or didn’t work. Go to the extreme on demo accounts, trade when there is volatility, take maximum advantage, make all the mistakes and explore all the mechanisms to lose money fast.
It will help you understand that trading is not a game of chance and the point of having a strategy is to protect your money. Trade as little as possible, but when you do it is essential to be very assertive.
Step five: Learn to identify the strengths and news that impact you
Not all traders are the same. Some of us are nocturnal, some are early risers, some are day traders. Some are interested in stocks, others in futures, others in currencies or cryptocurrencies.
Check which hours you feel most comfortable with, which assets are most appealing to you due to their trends and volatilities.
Consult the news and geopolitical situations that can impact your investment. It is not the same as operating in Australia, Asia, Europe or America. It is not the same to operate a continuous market 24 hours a day, than some that have opening and closing days, such as stocks.
Step Six: Develop Your Strategy
Risk management is the most important thing for a trader. Develop your own strategy, check if you feel more comfortable with the short term or the long term for the assets you have already chosen.
Study the market, always seeking to protect your capital from sharks. make a back test of your strategy and take a recording track. So you can find mistakes and successes that will help you fine-tune your strategy.
Step Seven: Don’t Follow What Others Are Doing, Develop Your Own Judgment
Do not give up. Don’t get tired of looking for easy fixes, like tracking another trader’s trades or looking for a signaling service. This puts an end to any advance to manage your own money yourself. Do not believe in trading services that seek to manage your account.
There are many useful tools and you can apply them, but you need to have a clear north and protect your strategy that took you so many years to develop. Do not try to persuade others or talk about what to do in trading, others must also follow their own learning path to success. But offer them your cooperation when they ask for it.
Andres Moreno Jaramillo
For The daily investor
Colombian economist, trader, financial adviser and economic and stock market analyst. Master in Banking, Financial Markets and Wealth Management from the University of Barcelona and EAE Business School in Madrid. He has 20 years of experience in the financial industry, 18 of which as a stock trader and adviser.
He currently promotes development and investment in capital markets, gives lectures, lectures, courses and seminars on investments, personal finance and financial planning.