How to become a trader from scratch
Making money from price movements is the fastest way to make a profit. You can double or triple your investment in just a few minutes. This is what many people, tired of overwork or unemployment, would like to do. And so most of these people began to wonder how to become a trader from scratch, what it takes and how promising this kind of activity is. The answers to these questions are covered in the following overview.
Who is a trader?
To begin with, we must try to understand who a trader is. Essentially, he is a common speculator, who buys cheaper and sells dearer. To do this, he needs to have a stock of money - in today's world, this is electronic money. Also, he needs access to the quotes and assets to be traded, all these conditions are provided by numerous brokers.
The trader earns money on the difference between the buy and sell price. And it does not matter whether the price is falling or rising. Anyway, with accurate analysis, he will always be in the black.
Professional skills and knowledge of the trader
To have such prospects let's consider what you need to become a trader:
- Firstly, one needs to have a trading terminal or access to one online;
- Secondly, you need to understand how to evaluate the possible rise or fall of quotes. And for this you need to have your own trading strategy;
- Thirdly, you need to know how to manage your money. This science is called money management;
- Fourthly, to become a trader from scratch you have to manage your emotions and control your behavior when analyzing or opening a deal;
- Fifthly, you need to choose fundamental or technical analysis.
But these are not all the conditions. Although they are easy to follow, you will have to develop or strengthen your existing skills and personal qualities. A trader must be stress-resistant, ready to process huge amounts of information, and make numerous calculations. They must also:
- Know how to use his calculations;
- be able to stop and rest on time;
- be disciplined in their analyses, keep notes, and not disregard trivialities.
At the same time, a future trader should not be complacent. This work is constant professional growth. Experienced traders never stop at their achievements. They have to improve their trading systems and find brokers with more favorable conditions. And in recent years, such traders have to master automated trading, where trading experts, expert advisors, systems, and robots are used.
What else a true expert in trading should possess is the ability to choose assets for trading. There are hundreds of currency pairs available for those who want to become a Forex trader.
The cryptocurrency market is gaining particular interest, especially among young traders. There are already hundreds of trading instruments with different volatility and yields.
There are about the same number of commodities, stocks, options, and futures. This direction will be of interest to those who wish to become a trader in the stock market.
Classification of traders
Profitability and speed of making profit are the main criteria in classifying traders. There are such types of currency, stock, and cryptocurrency speculators:
- Scalper - trades in time intervals of no more than 5-15 minutes. They can open dozens of deals during a day and always have a lot of false signals, so they take as little profit as possible from each deal;
- Intraday trader (intraday) - works with timeframes from 15-30 minutes to 1 hour chart. He closes all his orders before the end of the trading day;
- Mid-term - trades for several days. As a rule, it is executed until the next weekend. Leaves deals with positions rollover to other days; analysis is conducted on H1-H4 timeframe;
- A trader with a long-term outlook - opens positions only on daily, weekly, and monthly charts. Its transactions can be active from 2-3 weeks to a year.
- You may become a trader in any of these categories, the main thing is to follow the sequence described below.
The 6 steps of becoming a trader
There are only a few steps to become a trader - some of them are very simple, others will take some time. So - how to become a trader, step by step:
- Get training - on the basis of the chosen broker, on books of famous speculators, on third-party resources, professional webinars.
- To choose the broker with the necessary set of instruments, official registration, financial license, and obligatory registration at the international regulator.
- Develop your own trading strategy.
- Open a demo account, which you can use to test the broker's conditions, service quality, and testing your trading system.
- Open and deposit an objective real account.
- Make a trading plan.
That's basically it. Now become a professional trader, start earning and take pride in your new profession. Having passed all these stages, in the near future you will see whether it is worth becoming a trader or not. The fact is that you can earn by investing in trading. But it is a separate topic for discussion.
Amount of profit and tips for beginners
Profit depends on the size of the trading deposit, the number of opened orders, and the number of profitable deals. The trading lot size, the amount of leverage, broker's fees - all this affects the final sum of the profit. In practice, you will have to learn how to calculate all these things.
Traders with experience advise not to make mistakes. For example - do not rush headlong into trading, leaving your main work. There is no need to borrow money to replenish your deposit - only use your own, even if it is small.
Do not treat this activity as a game, an extra income - it is a job like any other.
And now that you know everything you need to know about this job, take the first steps in mastering the profession and become a successful trader, and earn as much as you need for full financial well-being!