5 Steps to Start Trading from Scratch and Achieve Success
May 4, 2021
Starting trading from scratch and achieving success. Is it possible? It's the classic million-dollar question. It's also a question that many ask themselves, perhaps intrigued by a world that, while appearing complex from the very beginning, promises more than a few satisfactions.
The issue is complicated. Firstly, because every person is different from the other, and therefore the possibilities and potential vary even with the same basic knowledge.
Secondly, because we are not talking about a "hard" science or even a well-codified discipline. There is no university of trading, an official path that ensures access among professionals. On the other hand, this does not mean that there are no opportunities to learn and cut one's teeth, quite the contrary. The context is simply fluid, fragmented, and sometimes difficult to interpret.
But let's proceed in order, answering the question...
Can you start trading from scratch?
The answer is yes, but at the cost of some sacrifices, more or less heavy, more or less prolonged. After all, if we exclude some extremely technical professions, it is always possible to achieve great goals starting from scratch, and it is not clear why this should not apply to trading.
Obviously, we are talking about potential. It is possible to succeed in trading from scratch, but it is not at all guaranteed that this will happen. In fact, the vast majority of those who embark on the path to becoming a trader without extensive knowledge behind them fail, losing time and money. Those who reach the top, however, unfold before them a scenario filled with possibilities.
The 5 steps to becoming a trader
The journey is neither short nor easy. It is not for those who already have some familiarity with investments, let alone for those who start from an even more disadvantaged situation. However, if you follow some precise steps, you can increase your chances of success. Here's what they are.
Studying the theory
Although some promotional messages speak of trading as the paradise of operations and immediately move on to "techniques", in reality all actions are based on a precise theoretical framework, which traders of all levels should know.
Even before tinkering with platforms and software (well before), it is important to build a wealth of theoretical knowledge on the mechanisms underlying financial markets. In short, it is necessary to study manuals. There are many around, and some serve as milestones.
Practicing with demos
Once you have acquired a sufficient theoretical background, it is important to engage in practice. Until some time ago, this meant getting your hands dirty in the real market, with real money. This posed significant risks for novice traders, who immediately jeopardized their capital.
Fortunately, tools are now available that allow you to practice without risks. We are talking about demo accounts, which simulate the real market. In this way, it is possible to become acquainted with the dynamics studied theoretically and complete your training in complete safety.
Specializing in a market, a segment, an asset
Once you have reached a good level of knowledge, it is necessary to deepen it. In fact, the specialization path should start as soon as possible. After all, financial markets are too complex to be embraced in their entirety. The trader, or aspiring trader, is called upon to make choices, to decide in a short time what they want to be.
It is a crucial and unavoidable moment. After all, stock traders behave and even think differently from Forex traders, and the same can be said for bond traders, crypto traders, etc.
Choosing a good Broker
This is also a decisive choice. The Broker, in fact, is not just a neutral intermediary that offers the technical basis on which to invest. In a sense, it designs the environment in which the trader operates, and this can be hostile or comfortable. Not to mention the obvious differences in terms of offerings, costs, commissions, additional services, etc.
Obviously, the Broker must be regulated, so references to licenses represent the first information that the trader should look for when evaluating this or that Broker.
Choosing a good Broker is essential, especially for those starting trading from scratch, as they need assistance more than any other type of investor.
Training the mind
This is a fundamental phase but very often neglected. The collective imagination, especially that of the uninitiated (precisely, of those starting from scratch), assigns to the trader characteristics that in reality do not belong to them. It sees them as a figure who is always self-confident, courageous, present to themselves.
In reality, the trader is a human being, and as such is burdened by many weaknesses. In fact, these interact with market stimuli, causing a continuous struggle between rationality and irrationality, between technique and emotion.
In simple terms, the trader is called upon to manage themselves from an emotional and psychological point of view. It is not at all easy; in fact, it is more likely to succumb to the stress that the market generates. After all, the stakes are by definition high, and security is an unattainable chimera.
The last step consists of training one's mind, practicing managing stress. It is not about suppressing emotions, an impossible purpose to achieve. It is about making emotions "harmless", ensuring that they do not impact one's choices.
A complex goal to achieve, but possible. The defensive weapons are both technical and mental. From a technical point of view, it is possible to adopt measures that subtract the most heated and emotionally risky phases from direct action. From a mental point of view, it is possible to embark on a personalized growth path aimed at effective stress management.
