It is not enough to have a good strategy for success in stock trading. You need to understand the difference in the psychology of a gambler and a professional trader. It is better to trade on a demo account or on paper before real deals.
Instructions
Step 1
Make sure you have enough cash. Alexander Elder in his books recommends risking no more than 2% of the deposit in one deal. If you understand that when a stop order is triggered, you will have to lose a large amount, discard this option without hesitation. Operate in markets where compliance with the 2% rule is possible. If the deposit is too small and the potential profit is not worth the effort, on the advice of Elder, find an additional job and save up money for a year or two to an acceptable level, only then start operating on the exchange. Otherwise, after a series of losing trades, you will be influenced by emotions and will drain your deposit due to psychological errors. A low level of risk will help you to be calm about the inevitable losses.
Step 2
Test yourself for your knowledge of the typical mistakes of traders. To do this, make a list of psychological and other traps that lie in wait for beginners. If you find it difficult to complete the task, do not rush to trade on the exchange. Check out the writings of Van Tharp, Alexander Elder, Alexander Gerchik and other professionals on this topic. The knowledge gained from books and video tutorials will not save you from personal mistakes, but will allow you to quickly realize mistakes and correct unsuccessful actions.
Step 3
Treat stock trading like a business, not a gamble. If in this business you are most attracted to emotional support, most likely you will lose money, because you have to pay for the pleasure. Business implies the presence of goals, a plan, resources, the ability to wait. Make a business plan as Van Tharp recommends. Do not go to the exchange until you have worked out all the possible risks in the plan.
Step 4
Create reserves to cover running costs. It will take time to survive on the stock exchange and start earning - about a year, according to Alexander Gerchik. Throughout this period, you should not be under the yoke of financial problems, otherwise you will not avoid mistakes associated with the desire to make quick money.
