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"Financial Support"
Are you considering a career as a full-time trader or as a hobby?
If trading is part-time, it may be fine as you have your regular income to rely on. However, transitioning to full-time trading requires thorough planning.
Before diving into full-time trading, it is advisable to have a substantial savings cushion of 2-3 years' worth of funds readily available. Additionally, discussing and obtaining approval from your parents or spouse before pursuing full-time trading is important. Having alternative financial support such as a side business, a working spouse, or parents who can provide financial assistance until you establish profitability can also contribute to your success in trading.
"Acquiring Knowledge Empowers Us"
In the trading profession, it's essential to have a deep understanding of various aspects such as technical analysis, price action, and more before venturing into the stock market.
Engaging in extensive learning is important by reading extensively on trading, watching educational videos on platforms like YouTube, and following successful traders to gain insights into their strategies.
Furthermore, performing thorough back testing on historical charts helps in comprehending price action and patterns, leading to a significant improvement in the ability to analyze live market situations.
"Get to know your own personality better."
When considering your trading method, it's crucial to align it with your personality.
Are you inclined towards pure price action, data-based strategies, or option hedging strategies? There's no need to adopt the same approach just because another trader has found success with it.
Your trading method should be a reflection of your unique personality. Remember, in the world of trading, there's no one-size-fits-all solution. It's important to trade in a way that truly resonates with your individual traits and preferences.
"For the first 2 months, it's advisable not to trade with real money."
As a new trader, it's common to make mistakes when starting out, which is why it's advisable to begin with paper trading. Spend the first two months practicing on a simulator to familiarize yourself with trading in the live market.
Only once you feel confident should you consider starting with a small trading account.
While emotions may differ between paper trading and trading with real money, the experience gained can provide valuable insight into live market trading.
"Keeping a Trading Journal"
Maintaining a trading journal is essential for creating an accurate and comprehensive historical record of your trading performance. This personalized performance database allows for in-depth analysis, helping to identify, review, learn from, and improve upon weaknesses. It is also advisable to save charts of all trades, complete with entry and exit markers, for post-market review and future reference.
While it may initially seem challenging to track every trade, it's important to recognize that keeping a trading journal is a strategic approach to enhancing performance and building confidence. In any professional endeavor, documentation is key. It's vital to document your planning, analysis, and results. Failing to do so reflects a lack of seriousness towards your work.
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| Trading journal template |
"Organize Your Trading Funds"
Having trading capital is essential, but it alone cannot guarantee success for a new trader. It is the combination of skills, discipline, and experience that ultimately determines one's success in trading.
Therefore, it's advisable to transition to live trading with a very small capital after two months of paper trading and then focus on preserving that capital for the next four months.
If, after six months, you have been able to maintain your trading capital, it is a sign of being a disciplined trader who follows risk management practices effectively. This indicates that you possess the qualities required to become a full-time trader, and you can plan to increase your trading capital accordingly.
