New traders taking their first steps towards learning the basics of trading should have access to multiple sources of quality education. Just like riding a bike, trial and error coupled with the ability to keep pressing forth will eventually lead to success.
One great advantage of trading the markets lies in the fact that the game itself lasts a lifetime. Traders have years to develop and hone their skills. Strategies used twenty years ago are still utilized today. The game is always in full force.
So for new traders wanting to take their first steps, I offer 10 great answers to the simple question, “How do I get started?”
1. Open a broker account
Find a good online broker and open an account. Become familiarized with the layout and take advantage of the free trading tools and research offered to clients only. Some brokers offer virtual trading which is beneficial because you can trade with play money to test your strategy and become confident in your trading skills.
2. Read books
Books provide a wealth of information and are inexpensive compared to the costs of classes, seminars, and educational DVDs sold across the web. My personal all-time favorites are: Trading in the zone by Mark Douglas and Think fast, think slow by Daniel Kahneman.
3. Read articles
Articles are a fantastic resource for education. Our website and free (private facebook page) offer great educational articles.
4. Find a mentor
A mentor could be a family member, a friend, a past or current professor, co-worker, or any individual that has a fundamental understanding of the market. A good mentor is willing to answer questions, provide help, recommend useful resources, and keep spirits up when the market gets tough. All successful traders of the past and present have had mentors during their early days.
5. Study the greats
Learning about the greatest traders of years past will provide perspective, inspiration, and appreciation for the game which is the markets. Greats include Warren Buffett, Jesse Livermore, George Soros, Benjamin Graham, Peter Lynch, John Templeton and Paul Tudor Jones, among others. One of my favorite book series is the Market Wizards by Jack Schwager.
6. Read and follow the market
News sites such as Yahoo Finance and Google Finance serve as a great resource for new traders. For in depth coverage, look no further than the Wall Street Journal and Bloomberg. By monitoring the markets each day and reading headline stories investors can expose themselves to trends, 3rd party analysis, not to mention economic concepts and general business. Pulling quotes and observing fundamental data can also serve as another good source of exposure.
TV is another way to monitor the market each day with CNBC being the most popular channel. Even turning on CNBC for 15 minutes a day will broaden an investor’s knowledge base. Don’t let the lingo or the style of news be a nuisance, just simply watch and allow the commentators, interviews, and discussions to soak in. Beware though, over time you may find that a lot of the investing shows on TV are more of a distraction and are overall full of junk recommendations. This is a natural evolution; you are not alone!
7. Consider paid subscriptions
Paying for research and analysis can be both educational and useful. Some investors may find watching or observing market professionals to be more beneficial than trying to apply newly learned lessons themselves. There are a slew of paid subscription sites available across the web, the key is in finding the right ones for you. At coinstreet we provide trading services for traders who are just starting out and traders who want to be consistently profitable.
IMPORTANT – Be careful. Many paid subscriptions come from independent traders and services that claim to have fantastic returns and can “teach” you how to be successful. 99% of them are a scam and should be avoided. Join our free facebook group to get to know coinstreet and what we are about. We don’t scam people we make them better traders.
8. Go to seminars, take classes
Seminars can provide valuable insight into the overall market and specific investment types. Most seminars will focus on one specific aspect of the market and how the speaker has found success utilizing their own strategies over the years. Some seminars are provided free which can be a beneficial experience, just be conscious of the sales pitch that will almost always come at the end.
When it comes to classes, these are typically pricey, but like seminars, they can also be very beneficial. Coinstreet will be hosting webinars and seminars in the near future.
IMPORTANT – Like paid subscriptions, be careful with classes and courses. Most are easily over $1,000 and are sold with false promises to acquiring valuable knowledge. Their fantastic sales funnels will suck you in, take your money, excite you during the course, then leave you with a strategy that wasn’t even profitable to begin with.
9. Practice makes perfect
The best way to get started is to simply take the plunge and make your first trade. Don’t be afraid to start small, even 1, 10, or 20 shares will serve its purpose of getting you in the game.
If trading with real capital is not possible initially, consider using a trading simulator for virtual trading. A variety of online brokers offer virtual trading for practicing.
One of the most common mistakes traders make is to go all-in and try to score big with a full portfolio position out of the gate. This is an often painful mistake and why many new traders suffer big losses early on. Proper portfolio allocation is extremely important.
10. Become a Coinstreet member
Learn how the professionals trade and analyse the markets. 1 on 1 trading education, e-learning, trading ideas from professional traders and more…