How to Become a Trader
"What steps must I take in order to learn how to become a trader?" is one of the most common questions we receive here at Trade With Precision. We have therefore set out below 5 key steps we believe every aspiring trader should take in order to give themselves the best chance of being a profitable trader:
1) Why do you want to become a trader? (WARNING: Do not skip this stage)
Trading can be one of the most rewarding challenges you ever undertake. It can also be one of the most difficult challenges you ever undertake. It has been our experience from teaching thousands of people to trade that it’s those with the biggest reason “why” they want to learn how to become a trader who typically have the greatest success.
If your sole reason for wanting to trade is “to make a little extra money” do you think this will motivate you to put in the hard work that is required to become a consistently profitable trader? The trader’s journey is a bumpy road and a big ‘why’ will keep you moving forward. We suggest you focus more on what would you do with the money, for example “I want to be a trader so I can quit my job and spend more time with my young family/elderly parents/spouse/church/charity/golf course/holiday home”. Don’t you think that would motivate you more than just “making a little extra money”. Make sure your “why” moves and motivates you every time you think of it.
2) What type of trader do you want to be?
There are two main types of traders: swing traders and intra-day traders. Swing traders typically hold trades for a few days to even a few weeks. They typically trade off mid to higher timeframe charts such as a 4 hour chart and above. Intra-day traders typically hold trades for a few minutes to a few hours and they usually trade of lower timeframe charts such as a 15 minute and below.
All too often new traders are drawn to either swing or intra-day trading because of what a mentor, friend or trading education company has told them or they have read about. They never take the time to work out which style best suits their personality, time constraints or what they want from trading. One misconception which aspiring traders often believe is that you need to be a day trader in order to make the most money from trading. This is completely false. The truth is the best traders make the most money, which style they trade is irrelevant.
3) Fitting trading around your lifestyle
When first learning to trade everyone has to juggle trading with their current lifestyle demands. For most this will include their job, family, exercise, eating, sleeping, etc. One of the biggest excuses people give for not succeeding in trading is that they simply don’t have enough time to devote to trading. We too were once in a similar position and that is why we have created a free webinar which covers exactly how to fit trading around a busy lifestyle. Click here to register for our free High Performance Trading for a Busy Lifestyle webinar.
4) Master technical analysis
Your next step in learning how to become a trader will be to learn about and then master technical analysis. Unfortunately a lot of the material you will read about technical analysis is outdated and simply doesn’t work. Consequently we have created some free resources for you to kick start your learning. Follow this link to learn more about technical analysis.
5) Choosing a Strategy
Your trading strategy will obviously depend upon which market and which style of trading you intend to trade. At Trade With Precision we teach people to trade any market, style or timeframe they choose. Follow this link for more detailed information about day trading strategies and this link for forex trading strategies.