Hey peeps…its been a while but we are back like we never left again dropping those bombs to help you create and build wealth for 2018! Many of you have been sending in messages about wanting to get into trading as a means of developing a secondary income stream…so I hollered at my boy Emmanuel C Duru who I know makes a serious killing as a full time trader to give us six simple tips on how to get started!
- Level up & decide what to trade
You must examine your current level of experience to understand what you know and what you don’t know, if you are a beginner I will advise taking a course with a legit financial trading educator such as babypips. This is a free online course that sets out the basic fundamentals and technicals of trading the financial markets e.g. what is a pip, understanding the position of Bulls and Bears, order flow theory and so on.
Babypips is a well known and one of the top viewed traders educational site. Everything a trader needs to get started with trading Forex (Foreign Exchange) is right there. Alternatively if Forex is not your thing then you may also trade commodities like Gold, Oil and Sugar. These days you can even trade cryptocurrencies such as Bitcoin. However for beginners I would recommend Forex as over $5 trillion (thats like 12 0’s!) is traded every working day on the Forex market from the likes of the investments banks, global corporates and retail investors. So putting it simply…theres plenty of money to go around!
- Start of with a demo account
The next step once you have done your initial homework is to choose a broker like IG or FxPro so you can develop a strategy that you can back test whilst on the demo account. I stress on demo account as they are principally designed to avoid inexperienced traders from blowing all their money (sadly I have done this several times) in the real market whilst testing new strategies. Back testing on demo should take a minimum of three to six months depending on the speed of your learning and practice. Yep thats right at least three to six months. If you think thats long or you thought trading was some get rich quick kind of thing that anyone can just jump on then sorry about it you better stick to your day job!
Always remember starting off on demo also helps you gain confidence about the process of trading and it’s also good as it helps you to assess your level of skill. After mastering your strategy or technique into consistent profitable trades then you can apply this to a real trading account.
- Trade around your lifestyle
There are nights that I set trade orders and wake up the next morning to a profit call. This can be done once you have a well-designed strategy, I have designed different strategies to suit my lifestyle and this is what I will recommend to anyone that wants to get into trading.
Everyone must have a set-up that works with their lifestyle. If you have a regular 9-5 or for whatever reason don’t have the time to trade on a daily basis, you can work towards becoming a swing trader that takes and holds position from two days to two weeks. Alternatively as markets typically move up and down during the day you may not like the anxiety when a trade is currently in the ‘red’. To be honest, I hate seeing reds and so short 5 or 10 minute scalp trades may be for you. These traders are known as scalpers.
It is advisable not to rely strictly on trading income until you are proficient so make sure you have other income streams coming in as trading is a business based on your performance. If your on this thing and want to be successful you have to approach and manage your trading like a business.
- Trading Plan
Another principal point to bear in mind is setting goals for your trading. A goal is one that is SMART aka specific, measurable, achievable, realistic and timely. As mentioned earlier avoid falling for the trap that trading is a get rich quick scheme or you can become a millionaire in a few days from trading. Rather plan towards it by looking at your account size, risk approach and reinvestment plans. It is true about the mantra ‘’the more you learn, the more you earn’’ so it is important to never stop learning because it allows you to refine your trading skill and progress from a beginner to an advanced level of trading.
During trading, fixing a certain percentage of your allocated money to trading as an acceptable loss is one of the winning factors as it put brakes to your over enthusiasm and prevents further losses. For example a good measure of thumb is to not expose over 20% of your account when making trades. Looking at it the other way round it is also important to set consistent profit targets so if your acceptable loss is 20% of your account then a good target would be to grow your account by 10% each day, week or month.
- Manage Your Emotions
This one is a BIGGIE! Emotional strength is very much necessary to survive in the financial market as once you start losing money there is a great tendency to dive back in the market to recoup losses to only end up losing even more money! You should choose the type of trading plan and style that best suits your personality. For instance if you don’t like to see trades that are currently losing then trading the higher timeframes (swing trading) may not be for you. Also remember random decisions often results in failure which would be the result of anxiety, anger, lack of rest or proper sleep. So managing your emotions is an important factor to emerge as a successful trader.
Remember even the very best traders have losing trades so you have to be prepared to lose money in order to make money.
6. Record all trades
Keeping record of all your trades whether win or lose is good practice which all successful traders do. Thoroughly review your trade and be a strict critique in terms of why did it lose and what improvements can be made to your strategy. It will help you a lot to grow as a trader as you will learn from past mistakes and ultimately become more profitable.
As the Journey goes
The journey to becoming a trader is very adventurous and it is important that you always keep a positive mental attitude regardless of the obstacles and success that you face. There are so many books on this aspect by popular and well recommended authors like Napoleon Hill “Keys to Positive Thinking” and “The Power of Positive Thinking” by Norman Vincent Peale.
Can Trading be another Income Stream?
YES!!! Trading is one of the best income streams that you can add to your collection because it allows you make money from anywhere in the world once you have a laptop, phone or tablet with internet connection. Winnings can far exceed anything that you have ever imagined with numbers that I thought was only CEO money! As Warren Buffet said “if you don’t find a way to make money while you sleep, you will work until you die”, trading provides that opportunity.
If you don’t want to handle the technical and fundamental aspect of trading, you can always sign up to a signal provider. DT Capital currently run a FREE signal service on telegram that saves you all the hard work and time of analysing the markets by just following their signals and trades.
Of course I don’t recommend taking trades blindly and any signal should be used to support your analysis or help you grow. The Finance Empire specialise in FX training, mentoring, coaching and account management so be sure to check these guys out too. Good luck on your trading journey and may the markets always move in your favour.
Hope you enjoyed the read and don’t be shy to leave a comment and share with your friends if you liked this post. You can also catch me speaking at the InspireLDN official launch event on the 30th March 2018! Follow the Twitter and Insta for more details. Bless.