Some beginners asked me what to do if they want to start trading. Well, maybe I can briefly summarise what are the things that can be done to pick up trading, be it stocks or forex or CFDs.
1) Look for some books that teach you stock trading or forex. Choose a simple book to start with so that you can easily digest and then slowly progress to books which teach you serious stuff.
2) Open a trading account. You need to find out which broker(s) you like best. Understand their commission rates. If you are trading stocks, remember to ask your trading rep (TR) how much credit limit they are giving you. If you are not a frequent trader, some TR may give you zero credit and you need to call them to release credit for your trading. Usually, it is about $30k for a new client. If you are a seasoned or big client, the credit limit can be from $200K to a few millions.
3) Learn how to use the brokers’ online platforms. You may do via the broker’s online introduction video or attend the talks in person. Understand what is market order, stop order and limit order.
4) Learn technical analysis (TA) (This subject is too much to be summarised in a few sentences).
You may also consider getting your own charting software and data.
5) Learn simple fundamental analysis (FA) (Although you may not use much of FA stuff during trading, but it is good to know).
6) Swing trading. Start to trade for a longer time frame from a few days to a few weeks. You may also hold your positions long term, looking at weekly chart signal.
7) Understand trading psychology. Try to know yourself, your greed and fear.
8) Adopt a risk management approach in your trading. Have a trading plan !
7) Intraday trading (depends on individual’s preference).
8) Automated Trading (you must know your stuff before you embark on this).
9) Last but not least, always monitor the markets and be persistent in your attempt to learn trading.