No one starts trading and immediately knows exactly what to do to make huge profits. Just as any other skill, trading is something that takes time to learn – but before you can start learning, you need to know how to start learning.
Rather than going big right off the bat, your best bet is to start small. That doesn’t just mean limit the amount of capital that you invest, but also the spread of your trade should be focused too.
In short, make small trades while focusing on a particular type of trade. For example you could focus on a single currency pair, a particular type of commodity, a certain equity, or something else of that nature.
The reason why it helps to focus your trades initially is so that you can become accustomed to the movements of that one type of trade in that one market. As you learn you can start to spread outwards and start to diversify – but only after you’re comfortable enough to do so.
Study the Market
Although at first it may seem as though many of the movements in a given market are random – as you start to learn more about the markets you’ll realize that they really aren’t. Numerous factors can affect the conditions in a market, including things like data from central banks, geopolitical developments, credit ratings, and so on.
As you study the market and learn more about the underlying reasons behind its movements, you’ll be able to predict the trends better – which will directly help you to make better trades. Make no mistake it will take time before you’re able to confidently predict how the market is going to move – but it is important that you start early.
Learn From Mistakes
No matter how careful you may be, when you first start trading you’re bound to make some mistakes. That much is inevitable, but the important part is that you learn from the mistakes that you make.
With every mistake you should dissect what went wrong. Figure out why you ended up making that mistake, whether or not there was anything you could have done differently, and what the best way to deal with that type of situation would be in the future.
Even the best traders in the business go through that exact sort of learning curve. It might hurt initially when you make losses, but if you’re learning from each experience then you’ll be able to avoid them in the future.
Remember to pick the market that you trade in with care. Using a platform that allows you to trade across multiple markets such as forex, equity, and commodities may be a good idea – and ETX Capital would be a good place to start. That way you will be able to delve into several different markets all at once, observe how they move, and figure out which one you’d like to start to trade on a more permanent basis.