In the below article we will be explaining about How to Learn Trading
How to trade successfully is most fascinating question
Follow the below steps to Learn about Trading
Open An Trading Account:
You can’t learn Swimming without getting into water
First thing first open an account with very small capital
Place Your First Trade:
Just buy small quantity of any stock and watch what happens in the price and your thought process on buying the same
Now you will be end with following questions
Why should I Buy a Stock ?
When should I buy Stock?
When/Why should I sell the stock?
The above questions will be answered by Technical analysis or Fundamental analysis
Most of new comers will not know whether they should be a trader or investor to answer this question
Study the methods of great traders and Investors throughout the history and understand who inspires you the most
If investors like Warren Buffet, Philip Fisher, Benjamin Graham, Peter Lynch Inspires you need to select Fundamental analysis and investing as your method
If traders like Jesse Livermore, George Soros, Jim Rogers Inspires you need to select Technical analysis and Trading as your method
If your Personality and natural Tendency will align with investing method and concepts trading may not fit for you
But we should acknowledge the fact that many successful people doing both investing and trading, if you are interested in both it’s well and good
If your Personality and natural Tendency will align with Trading method and concepts you can read further on as we will discuss only about How to Learn trading in this article
Initially focus on learning the method and strategy. Forget about money and Profits
Think about developing a winning strategy
Before kick-start you learning path you should be aware of below stages of trading
Strategy Development:
The Trading strategy or method is nothing but series of buy and sell rules
Example of Buy rules:
Buy when prices closing above 52 week high
Example of Sell rules:
Sell when prices closing below 52 week Low
Once buy and sell rule decided you should decide on Stop loss criteria if trade goes wrong
Stop loss is Risk management tool to avoid capital being wiped out due to single wrong trade
Example of SL:
Exit if I lose X amount in a particular trade
Back Testing:
Once you decide on Buy and Sell Rule you need to move to Back testing Part
Once strategy has been developed you need to back test the strategy either manually or using the back testing software
If your system back tested by back testing software it should be manually cross checked for small population of trades
In the back test report you will simulate your buy and sell rules in the historical data
If you are fine with Back tested result you should move to next step
Live Testing:
In this stage you will test you trading strategy for a couple of months
If you are happy with result you can proceed with Next step that is live trading
Live Trading:
In this you can start trading you trading strategy in live markets
you can read below books for Deep understanding about above topics
Discipline:
Once you started trading with system with positive expectancy the success in trading going to be decided by your trading psychology and Discipline
We have shortlisted below books to learn trading in 60 days
Invest 60 days for reading below books it will give you multi fold benefit in future
Consider it as Investing in yourself you will eventually reap benefits
We have put lot of efforts in shortlisting the book list,it will covers all the segments and make you comfortable trader when finish the course
Trend Following (Updated Edition): Learn to Make Millions in Up or Down Markets
Time line:1-10 days
Technical Analysis of Stock Trends
Its an foundational work on technical analysis and must read for new traders
It will deal with How to improve your trading and investment performance by analyzing stock trends
How to apply the three basic principles of charting, and how to interpret common patterns. When to buy when to sell and how to use stops etc
Time line:10-17days
A Comprehensive Guide To Trading Methods And Applications (New York Institute of Finance) by John J. Murphy is an excellent reference book that attempts to teach traders the complicated relationship between technical analysis and stock markets
Time Line:17-25 days
Trend Following (Updated Edition): Learn to Make Millions in Up or Down Markets
My favorite of the new TA [technical analysis] books is ‘Trend Following’ by Michael Covel. Straightforward, easy to read, this book is rich in details about why trend following is such a successful strategy amongst some of the world’s best-performing hedge funds
Time Line:25-30
Come Into My Trading Room: A Complete Guide to Trading (Wiley Trading)
This book teaches you to manage your money and time, as well as strategy, so that you can enter the markets with confidence and exit with profits. This essential book educates the novice and gives more power to the professional through expert advice
Happy Refresh for 3 days
Time line:34-40 days
Market Wizards: Interviews With Top Traders Updated
A good book to read, nicely written and gives a good insight on how top traders trade. This is a must have book for everyone, especially for swing traders
Time line: 40-46 days
Reminiscences of a Stock Operator
To begin with it looked to me as a personal trading philosophy but by the end it became like a general guideline for traders. How a trader should plan, what should he be aware of and how he should stick to HIS rules of trading. Trading, as I understand is a profession which needs deep understanding of stock market operations along with a general knowledge of economic matters in your surroundings like country
Time Line: 46-52 days
Trading Systems and Methods (Wiley Trading)
For me this book is great for inspiring system development ideas and getting another developers views on how to program the logic for certain trading ideas.this is my cornerstone reference to get the juices flowing and at least get me to the end of the runway with a few possibilities
Time line:52-56 days
Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude
It has changed my way of think about markets and most importantly about myself as a Trader,It is the best investment I have done for my trading career
Time line:52-60 days
Trading Habits: 39 of the World’s Most Powerful Stock Market Rules
Time tested stock market wisdoms are presented in a easy to understand format
one should keep visiting this book again and again to imbibe these rules in ones trading. Practice it
