Learning to trade correctly can be overwhelming for a beginner trader. There are so many different trading methods, systems , and opinions available.
If you read this lesson, you are lucky, as I will save you a lot of financial and emotional pain (and possibly physical pain if someone else’s investment is lost). As I learned to trade, I experienced emotional ups-and-downs, mental confusion and stress, and hundreds hours of research and studying. It’s not possible to see all of it, but you can avoid many ofmistakes leading mental stress and loss of money .
This will help you to learn faster and start your trading in the right way.
It is the “getting started” guide to trading that I wish had been available when I started. I have written it to give you a clear path to follow and help you avoid the many mistakes that traders make while learning to trade. This will also give you some reality checks and hopefully put you on the right track from day one.
Avoid Day Trading and Scalping…
It’s no different than playing slot machines at a casino for half a day. When used in a high-frequency fashion, such as day trading and scalping, any type of trading edge is diluted and less effective.
Consider it for a moment logically: A trading “edge” is an ‘event ( Price Action Setup ) in the markets that gives you a clue into a possible up or down movement in the market. It tells you the market has a greater probability of moving in a particular direction, even if that probability is only slightly higher. Logic dictates, however, that a higher-probability event is unlikely to occur with high-frequency trading, at least not in terms of trading.
In trading, you will get a few high-probability signals a week or every two weeks on the 4-hour and a You will receive a few signals with high probability every “eek or two weeks, on the 4-hour chart and daily charts. As you move down in timeframe, the direction of price bars and useless data becomes more common.
If they did, then everyone would be wealthy traders. Everyone agrees that patience and discipline are key to trading. If they don’t, they should. It makes no sense to say that scalping and day-trading are the most effective trade methods. These are low-probability styles of trading that don’t fit with most people’s mindsets, personalities, and genetic makeup.
The opposite of “cool” or “easy” ways to make money on the stock market is day-trading. Day-traders are addicted; they don’t feel like gamblers in casinos. It’s easy to become addicted to the adrenaline rush, anticipation, and other feelings. The market provides you with an endless supply of opportunities to satisfy your addiction.
This cited image, coupled with the addictive nature of day trading, gets people hooked. It also makes it easy to market and sell to new traders. Scammers will tell you that day-trading or scalping the market is the way to wealth, but this is not true. Making money is more fun than day-trading. Day-trading, on its own, is not fun.
Forget about Robots, Systems, and EAs
Black-box trading systems (robots) and EAs (expert advisers) are another trading trap that you should avoid at all costs. They promise to automate trading and generate profits like EA’s n ATM, but the reality is the exact opposite.
Trading is not a fully automated system. These rigid trading systems may work for a few weeks or months when the market is experiencing a strong trend and low volatility, but they will fall apart as soon as market conditions change.
Trading is no different. Wake up and smell those roses. If you think that rigid trading systems, EAs, or robots will make you wealthy over the long term, you’re in denial. The systems are usually a complete waste of money, with fake results. The results are inflated with curve-fitted equity arcs, but when they trade live, the systems can burn.
These automated trading systems are a broker’s dream because they generate a lot of trades (think commissions and spreads that line the broker’s pockets), but I think they can be lethal to a trader’s account. These system brokers sit for brokers because they can generate many trades, which means commissions and spreads all in the broker’s pocket. However, they are deadltrader’s account.
Trading success comes from learning how to trade methods properly, gaining screen time and experience to develop your broker’s intuition, and then using that feeling and skill to combine with patience and discipline to follow your method at all times and manage your risk. You won’t be able to beat Marttrader’s “Turbo Pip“ trading robot.
If you don’t like my (very experienced!) word, then you can Google some of the world’s most successful traders, intrinsics, and market wizards of today, such as George “Soros and Warren Buffetdo, who don’t find it hard to believe that any of these people use $99 trading software or black-box trading software. Remember: If something sounds too good to be true, it most likely is.
No fan. You’ll find computers or gadgets.
I trade from my laptop, which has only one screen. You can do the same. I use a simple MetaTrader4 trading terminal, with daily charts. There is no clutter; only price action and black and white candles on a white background.
Overload of information, equipment, and data are real problems that can affect new traders in a negative way. You don’t have to buy all the “crap“ being sold. You don’t have to buy expensive data feeds and $3,000 trading machines. These will only cause you to spend too much time analysing variable, and not commit to the “mark” t. This is the madon’tason why people lose money on the stock market.
Choose your trading strategy wisely
There are literally thousands of different trading strategies and systems. There are literally thousands of different trading systems and strategies. From day-trading to indicator-based trading systems to trading robots that promise to automate trading, there is a seemingly endless list of trading methods. Some of them are ridiculous, like Elliot Waves, Gann Angles, fractals, and even astrological trading.
These methods are confusing, chaotic and draining mentally if used long-term. I’m sure that whoever came up with some of these ideas could have ended up in the local loony ward at one point.
These methods are all  B.S. They are sold to newbies or uninformed traders to make them look good.
After years of searching, I found that price action analysis is the best way to read charts and predict price movements. When I dedicated all my time, attention, and study to this method, I started to see results I’d never seen before. It was a turning point in my career. Price action traders are interested in raw price (clean charts), technical analysis, and price action. They then develop a forecast of where the price is likely to go, and trade accordingly. It’s not complicated or messy.
You need to stick with a particular method for a while, and not just jump from one thing to another. You won’t succeed if you are constantly changing. It’s losing patience (this is true in trading as well as life). Keep things in perspective. This is what I’m saying: don’t be a victim of the “won’t-tem-hopping” syndrome that plagues many new traders.
Select Your Trading Mentors With Care
You would probably agree that anyone who is serious, out to learn and improve their skills, would attend a course, seek out mentors, or get an education. It is important to get an education in trading. You need to choose a style of trading (ideally price action) and find a mentor that you can relate to, who understands you, and who fits your personality.
You can tell if someone is trying to connect and help you by using common sense. It is essential to find a mentor who regularly updates the market and provides real-time commentary based on their trading strategies. This will allow you to put together the puzzle much quicker than just reading the theory. It is essential to have a direct line with your mentor if you require clarification of theory.
In 2008, I created my education service to provide all that I have just mentioned above, and more. I wanted to give aspiring traders the service I wished I had when I first started out in my career. I wanted to transform the online trading experience for traders.
You can find out more about my trading education courses and my trading newsletter here. Keep it simple, no matter what path you choose.
