You have made the decision and you want to start trading in the financial markets.
There are some things that need to be in place before you can take the next steps towards your financial future. Preparation is the name of the game when we are just starting out. Certain things need to be in place before we can even think about conducting any trades. Besides, where do we even go to place these trades?
We’re not just talking about motivation. You have already made the decision you want to do this. We are talking about creating routines. Routines will become particularly important and will eventually turn into healthy habits that you carry out daily.
The first behavior you need to develop is the habit of studying the markets. You will need to review the news, study charts, make notes of price levels, and determine your bias (bullish, bearish, neutral).
A lot of trading is analyzing and researching. We never just jump and make a trade based on a 50-50 chance of either going up or down.
Next, you need to schedule time for your trading business. Is this going to be your new full-time job or are you just doing this to supplement your income and bring in some extra cash flow? Always remember to start small and most importantly be consistent.
Starting out you might want to spend 1-2 hours a week studying the markets, and getting accounts set up, till you’re able to start devoting more time (even if you have a full-time job). The key is a creating a routine, and be consistent with it.
This is your how, why, and when of trading. You need to establish some risk rules. These are rules you are going to consistently follow to protect your capital. You need to set goals and have a strategic plan for how you are going to make money. That plan should include the strategies you are going to use, how you are physically going to trade. Develop your routine, including analyzing the markets and most importantly educate yourself. Continue learning and developing new skills in Legacy’s Building Wealth Club.
Well, in order to execute these trades, we are going to need some tools. We need some resources where we get our information. You are going to need a charting resource as well as a fundamental research resource. A charting resource is where we can see the technical analysis of how things are moving in the markets. A fundamental resource is where we are going for our news and information. We are also going to need a broker and a virtual trading platform.
There are tons of these out there and ultimately it is your decision but check out our additional education on “choosing the right broker” to get an idea of some of the things you want to look for. Lastly, we are going to keep a trading journal. It is imperative that you keep notes and records during your trading process.
what type of trader you are or want to be. Are you a day trader? You plan, enter, and exit trades within the same trading session or within a 24-hour period. Your broker will have requirements in order to trade at this level.
Are you a swing trader? You plan and enter trades that anticipate at a minimum an overnight hold and can last up to several weeks.
Are you a position trader? You plan and enter trades based on longer term fundamentals and perspectives that extend beyond typical short-term swing cycles and can last months to years if the trend persists.
The amazing thing about this is that you can, and probably will be all three. Once you learn the fundamentals, you allow the markets to tell you what type of trader you should be.
It allows the flexibility to go at your own speed. There is NO COMPETITION! You, your mother, your neighbor, and Warren Buffet could all make the exact same trade. So don’t get caught up in feeling like you’re missing out and you want to jump right in. It is more about learning the system, developing a routine, and mostly being consistent. The first step is to just get started and Legacy Education is here to help you do that, get started and keep learning about the financial markets.
Join Legacy’s Building Wealth Club today and continue your journey. Let our education and experience lead the way!