Who can deny the captivating sight of increasing value of money? None! Truly this is the charm and allure of trading. Therefore, people irrespective of their age, whether old or young, are drawn to trading like iron gets drawn to a magnet. It is definitely a means of wealth generation. But not everyone that trades earn money. Sadly, more than 90% of the traders lose their money, and only 10% are successful. So, what is really required to be a successful trader for beginners or successful trader?
Before we decode that into this blog, let’s have a reality check! It is important to understand that trading is something which can’t be mastered in a day or two by simply doing a stock market webinar or a stock market courses online free with certificate. One has to build a mindset which doesn’t stray down to the emotional decisions. One also has to be disciplined in their trading style and system. If one lacks them, the possibility of losing all the money is very high. Simply relying on a stock market courses online free with certificate or YouTube videos or free guides to master trading isn’t going to make you a profitable trader.
For you to be a successful trader for beginners or successful trader, you must be able to develop this mindset. To do so, you must do atleast a couple hundred trades, just to identify and correct your mistakes. Your mistakes are the biggest learning lessons as well as reflections of your progress. Trading is to be understood as a skill, which one masters with experience, where correct and tested trading knowledge acts as a base, which could be gathered by any stock market paid course. With all this information, let’s gets started on the roadmap to be a successful trader for beginners or successful trader.
Getting Started: The Foundation of Trading
A. Understanding the Basics of Trading
- What is trading?
Trading is simply a process of buying and selling assets in a relatively short term with the goal capturing a sudden movement, i.e., trend and generating profits through it. Unlike physical world where you can buy and only then sell, in trading you can sell first and buy the assets later. This type of trading is called shorting or short selling.
You can do all the types of trading in assets such as stocks, derivatives, forex, commodities etc. Taking entry in a trade is called opening or taking a position, while exiting with a sell order (or buy order in case of short selling) is called exiting the position.
- Key financial markets:
For a trader it is important to firstly understand and select the asset they wish to trade into. While one can trade in all of them, it is important to associate themselves with a certain kind of market and trading style. Timings and characteristics of every market are different, and one should choose them as per their availability.
- Trading jargon:
Before entering any type of market, a beginner trader must focus on learning the meaning, relevance and application of the jargons. To be a successful trader for beginners or successful trader, one should have a fair idea of what are the rules and jargons of the market. It should not be like, when a jargon comes up, the trader is doing a google search of that to understand its meaning.
Setting Realistic Expectations
- Risk and reward: Majority of the traders fail and succumb to losses as they have very high expectations and believe that they can multiply their capital in days and weeks, even in couple of trades. It is important to understand that to be a successful trader for beginners or successful trader, one must understand that good trading is a game of balancing risks and rewards, where with increasing reward, risk also increases. Thus, it is extremely important to have realistic expectations to be a successful trader for beginners or successful trader.
- Time commitment: For a trader it is extremely crucial to devote proper time in learning good strategies from a stock market paid course. A trader, who rushes to being present in the market after learning the concepts improperly, is bound to lose, as markets are a fat shot than what theoretical strategies convey. Thus, it is necessary to devote time in understanding the optimizations and exceptions in trading taught in a stock market course in Noida. Even after completing the course, a skilled trader never ceases to learn, as then they learn from the mistakes they commit while trading.
- Emotional control: As you read above, even after doing best stock market courses in Delhi, traders are bound to make losses initially and it is a completely normal thing. We have also faced this in our initial days. The reason behind these losses is very simple- falling pry to emotions. As a trader who’s starting off, it is human for them to surrender before their emotions and failing to stick to the strategy. A skilled trader understands the importance of avoiding impulsive decisions and sticking to strategy as these two trades will make them profitable in the longer term.
Building Your Trading Plan
A. Defining Your Trading Goals
- Short-term vs. long-term trading: While there may be several pros and cons of certain type of trading styles, a wise trader understands the fact that pros and cons change with the style they adopt. For an intraday trader, it might seem foolish to put money into some trade and wait for weeks, while a positional trader might feel exiting out of the instrument in a day equivalent to taking an early exit. Thus, to be a successful trader for beginners or successful trader, one must figure out the right and holistic approach to their trading style.
- Financial goals: Most of the beginner traders have a goal that they will have 50% profit in a couple of months or in this quarter which is a wrong approach. To be a successful trader for beginners or successful trader, one must focus on splitting the goal into realistic monthly targets, like generating 5% profit on the amount invested in 8 out of 12 months as a statistical average. Having a big unrealistic goal in trading is simply an act of childishness.
- Risk tolerance: To assess which trading style suits you better, you must do atleast 10 trades from each trading style. With an understanding of which trading style you’re comfortable in will build your trading system with relevant strategies. To be a successful trader for beginners or successful trader, this is one of the most crucial steps.
B. Selecting the Right Trading Style
There are 4 types of trading styles:
- Scalping: In this type of trading, traders enter and exits from their trades in hardly a few minutes, or even seconds. In such type of trades, the quantity is usually very high.
- Intraday Trading: In this type of trading, the trader, closes their trade in a day itself for a profit of around 1%. It is important to note here that you can’t short sell in stocks for more than a day.
- Swing Trading: In this type of trading style, trader takes position in the asset and holds it for more than a day and less than 10 days, i.e., 2 weeks for a profit of around 3-5% and then exits it.
- Positional Trading: In this type of trading methodology, traders hold their position for more than 10 days and less than a year, with a target of achieving a profit of usually 5-10% or even more.
C. Developing a Trading Strategy
- Technical analysis: As a short term trader, the bible to trading is technical analysis. To be a successful trader for beginners or successful trader, one must master technical analysis. This mastery could be in any trading concept like chart patterns, indicators, trend analysis or a combination of them. Although a wise trader who has graduated from a stock market paid course, understands that they must exit using the same strategy with which they have taken entry.
- Fundamental analysis: While fundamental analysis might not play a very significant role in intraday or scalping, it would play a significant role in swing and positional trading approaches. One needs basic fundamental analysis of the company to prevent themselves getting stuck and not able to exit. Often these companies in which this phenomenon (circuits) occur, have very poor fundamentals and belong to penny stock category. To be a successful trader for beginners or successful trader, one also gradually learns that as news, economic data, and sentiments only affect the short term trend.
Risk Management and Trade Execution
A. Managing Risk Effectively
- Setting stop-loss orders: The most obvious reason as per stock market courses in Chennai to why beginner traders lose money is that they become long term investors in stocks or assets which go opposite to their analysis. It is important to understand that if a trade has gone the opposite way, then one must exit the trade after a certain threshold. This risk management tool is called as Stop-loss or SL and to be a successful trader for beginners or successful trader, one must always have a SL strategy in their backpack while trading.
- Position sizing: To be a successful trader for beginners or successful trader, one must understand that it is not at all wise that you risk more than 5% of your trading capital in one single trade. Despite how lucrative the trade might seem to be, it is important to understand that markets aren’t going anywhere and neither you’re going to stop trade. So, a wise trader, utilizes their trading capital wisely.
- Diversification: You might feel that diversification is something which would be a foreign concept in trading. It is not the case. A wise trader, despite their trading skills doesn’t put all of their money in one trading asset. They diversify their trades in different assets such as stocks and derivatives and sometimes even a combination of them. Even if they are an intraday trader, they would have a diversified investment portfolio with them, which provides them with returns in bad months when markets are choppy.
B. Developing a Trading Routine
- Pre-trade preparation: To be a successful trader for beginners or successful trader, you must learn to perform research, and identifying potential trade opportunities, a day prior to taking entry. An experienced trader who has done stock market course in Noida, will never analyze charts in live markets. Rather they would only focus to place their order and optimize during live markets. A live market analysis is more susceptible to emotional mistakes and inaccuracy than analysis in closed markets.
- Trade execution: An experienced trader will always use the same strategies for entering and exiting trades efficiently. To be a successful trader for beginners or successful trader, you must not waver and think that a different exit strategy would provide you with a higher return as the entry hadn’t been taken with that strategy.
- Post-trade analysis: To be a successful trader for beginners or successful trader, it is quintessential to evaluate your trade performance after the day’s end or exiting the position. Identifying and correcting own mistakes are the biggest learning from post trade analysis. It is a well knowing saying in the trading fraternity that best traders learn from both their successes and failures.
C. Controlling Emotions and Staying Disciplined
- Managing fear and greed: It is not easy to conquer emotional rollercoasters for a trader, but to be a successful trader for beginners or successful trader, one must slowly learn to handle it. In this pathway, many stock market paid course coach techniques to overcome emotional biases.
- Stick to your plan: One must not jump to multiple strategies before doing a certain number of trades, just by seeing someone else’s performance. They must understand that both individuals are different with a different style and mindset. One must understand the true importance of following own trading strategy and optimization if something is going wrong.
Continuous Learning and Improvement
A. Expanding Your Trading Knowledge
- Reading books, following news and attending seminars: To be a successful trader for beginners or successful trader, one must not stop their learning. They consistently keep learning about trading and advancements in the field from various stock market books, genuine news handles and stock market webinar. They also have a fair idea of the recent stock market trends.
- Engaging in trading communities: To be a successful trader for beginners or successful trader, one should also participate in forums, workshops, community meetups and social media groups to learn from the experience of seasoned traders. One of the best ways to be a part of such communities is attending stock market webinar.
B. Practicing with Demo Accounts
- Benefits of demo trading: If someone isn’t confident to start trading with a small amount, then a demo account is a perfect solution for them. As per best stock market courses, it helps in simulating real trading scenarios without risking real money. This way, people build confidence in themselves to start trading with a small amount.
- Developing and testing strategies: If someone is starting from scratch without any knowledge of trading strategies and even without any stock market courses online free with certificate, they must start with a demo trading account. Using such accounts, helps to develop and refine trading approaches for building trading setups for oneself.
- Transitioning to live trading: To be a successful trader for beginners or successful trader, one must quickly transition to trading in live markets with a small amount after one has built confidence in them as well as their trading strategy. It would certainly not be easy, but one can’t be stuck in a demo trading account forever.
The journey to be a successful trader for beginners or successful trader is not an easy one. With such craze in social media about trading being a high income skill, people ignore the fact that it destroys capital of those who don’t do it properly. In the journey to become a good and skilled trader, one learns the importance of patience, continuous learning, and perseverance over time and trades they take with Top 5 Online Stock Market Courses in India. It is also important to look at percentage returns and celebrating small victories, rather than looking for absolute returns. If one can manage a trading capital of Rs 5,000 then they could handle a portfolio of 5 lakhs and 5 Cr easily too. Acknowledging that percentage success in trading is a result of consistent effort and incremental progress. Trading is not something, which is merely counted as a skill, it teaches you how to live your life!