Everyone has known for a long time, that human desires are endless, but the resources to satisfy those desires are limited. The worst thing is in the fact, that our expenses increases due to our responsibilities increase. In the same moment, our income would not necessarily increase at a comparable rate. A lot of people choose commodities, currency and stocks investing to get an additional income, but most of them during last past years invested passively and very few people chose an active trading.
Now, many of them choose online trading platforms to close the gap between their income and their expenses. Online trading allows us to deal with the currency, commodity and stock markets from your personal PC or Mobile Device, which is much more, than just comfortable.
This advantage attracts a lot of new members, and they can easily loose in the financial area without a good guide. This article is going to help Green Traders to make a first step in their long path of becoming a Master Trader.
Basics for Beginners
When you made up your mind to become an online trader, you must discover all about basic trading quotes. Such terms, as Buy, Sell, Pips, Micropips, Currency Pairs, Lots, Ask, Bid, Size, Last, Change, Open, Close, High, Low, and Volume, have to become the foundation of your Trading Bible. You must not just understand their meaning; you must know how to operate these items in different situations.
Every trading area has its own specific terms. For example, stock trading is impossible to imagine without such market indicators, as Dow Jones, S&P 500, Russell 2000, NASDAQ composite, and NASDAQ 100.
Order placing terminology includes Buy, Sell, Quantity, Price, Duration, Type of order and used for defining the variation to your order.
The young trader also must know the position terminology, which includes Long, Short, Bull, Bear, Call, Put.
You should understand, that your decisions affect on your trading account and finances at all. Unfortunately, most young traders can’t see relations between a trading accounts and profits and don’t understand the seriousness of their trading decisions.
Improving Your Trading Skills
To be sure about the success of your future trades, you need to improve your trading skills.
How to do that?
First of all, discover different types of trading strategies and then choose that one, which will mostly fit your capital, trading experience, risk level, available time and personality traits.
Discover what a bull market is and what the bear market is; learn the specific of working there due to your strategy. Analytical tools will help you to make data-driven trading decisions, so learn carefully how to use it. Fortunately, online trading platforms mostly offer some analytical software.
The clear vision on the trends in your trading activity and market cycles will help you to make smart short term and long-term trading decisions.
Experienced traders have a good habit of reading breaking market news, take an example of them! But just reading that news is only a half of work. You need also discover the process of deciphering that news in your trading interests.
With time, you will learn how to predict the outcome of any given trade and how to act in different situations. The earlier you develop this skill, the earlier you’ll reach a solid trading level. Distinguish Entry and Exit price. The first one is needed for entering a trade, the second – for enjoying your profits or for cutting your losses.
Remember, that the brokerage commissions and fees have a big impact on your account. But clever traders always put them in their favor.
Learn how to work with limits!
The trading journal, where traders usually record all trading information, is another good trading tip for beginners. The main point here is in regularity of it filling.
Avoid the Pitfalls like the Plague
Usually, trader beginners usually try a demo account before opening a real one. Remember, that during your demo trading you should avoid perceiving the trades as a game only because you are not trading with real money.
Choose that demo trade, which will reflect your true trading capacity. For example, if you open a real $5000 trading account, don’t demo with a $200,000 account! You will learn nothing helpful and just irritate yourself!
Realize, that you are a beginner, and choose the relevant trading level. Don’t jump into an advanced trading area.
Do not be tempted to try a margin trade. Such sweet thing as leverage promises you a huge profit, and it really could happen. But on the other hand, it can bring an “unlimited” losses if you enter the wrong trade.