How to start Trading?
I'm very active in a few communities (the Tradingview official Discord for example) and one of the most asked question is: How do I start trading?
Let me try to give you a blueprint on what to do to at least get some foot in the ground!
Lets make something clear: you are learning a new job here! thread it that way and you will have the best chances!
(No job on this planet can be learned in just a few weeks, you need months and years to get on a level you can be sell-employed)
I give you a fast-track on certain things but make sure you research every point more then I provide still, this is just the blueprint.
After that, its you that has to study. no one can help you there..
--- Candles ---
OHLC (Open High Low Close) is all you need, its the founding blocks on 99% of TA out there!
Open and Close are the values when the candle opened/closed on the timeframe you are on.
High and Low is the highest and lowest value trades were happening while in the timeframe (also called: Wicks).
Volume is also something you hear a lot and is important to know, it shows how much was traded in that candle (shows the power~)
--- TA (Technical Analysis) ---
With TA we try to predict a probability in future prices to find opportunities in the market.
Across Tradingview there are thousands and thousands of indicators available to you, we just need to focus on the biggest and most common ones for the start.
RSI
MACD
Moving Averages (simple, exponential, smoothed, and so on..)
Price trends
Support and Resistance
Volume
Start with those 6 and work your way through all of them, analyse how they work, what they mean, where they come from and you have a good knowledge for future improvements.
(yes, you probably don't need all of them, its just a good base to have)
--- Trading Terms and there meaning ---
Learn the following words and what they mean in the sense of trading:
- Long / Short
- Bid / Ask (combined with spread below)
- Crypto, Forex, CFD, Stocks, Options (Bonds, Shares, Indices...)
- Market Order / Limit Order (Stoploss, Profit Target)
- Leverage
- Margin
- Spread / Slippage (related to News)
there are a lot more to learn, but this will get you suited for the next few points.
--- Find your way ---
Find what you can do and what you can't do (some of us have family, a 9to5 job, other things) that will not let you trade every way.
Make yourself a time-table, a budget plan and then research on this criteria how you want to spend your trading-time.
(If you have a 9to5 job, you probably cant watch the chart on a minute timeframe, so strategies involving this is not suited)
--- Risk Reward ---
Calculate how much you need and with that information backtest your strategy to find out how profitable it is and then set your risk:reward ratio to the calculated risk you can afford to lose to still make the profit you need in the end.
Example: If you lose 2 trades with a RR of 1:5 and win another one, you won 3R (Lost 2 = -2R, Won 1:5 so + 5R = 3R - its not precise, as there is slippage and commissions). If you are happy with 2R, then thats the way you trade from now on.
Keep this always the same as the math dont lie but your feelins will try to betray you (thats the psyochology part that comes up next)
This point is very, very important to understand and to learn and to adapt to your circumstances. if you don't do that, you will fail no matter what!
--- Psychology ---
Well, thats one of the major points and its very, very big.
Do a lot of research on this part and also use papermoney as kind of a challenge for yourself so if you lose it, you still get "mad".
baseline is: dont have feelings! it has to be all mathematical and mechanical.
--- Paper Trade ---
Yes, don't use your own money in the beginning, you can paper trade on Tradingview for free without any risk and you can test all the strategies/indicators on this planet for free and see how they perform.
Make challenges for yourself (so psychology is also trained).
Don't underestimate this point, paper trade for at least 6 month every day 6h to really grasp what you are up to, what you are doing, how to improve everything and to get the feeling for everything!
Once you went through those points you are given a toolbelt with a lot of tools, now its time to figure out what tool to use in what situation.
Research a lot of strategies and find something that works for you.. and then melt it into something useful!
Let me try to give you a blueprint on what to do to at least get some foot in the ground!
Lets make something clear: you are learning a new job here! thread it that way and you will have the best chances!
(No job on this planet can be learned in just a few weeks, you need months and years to get on a level you can be sell-employed)
I give you a fast-track on certain things but make sure you research every point more then I provide still, this is just the blueprint.
After that, its you that has to study. no one can help you there..
--- Candles ---
OHLC (Open High Low Close) is all you need, its the founding blocks on 99% of TA out there!
Open and Close are the values when the candle opened/closed on the timeframe you are on.
High and Low is the highest and lowest value trades were happening while in the timeframe (also called: Wicks).
Volume is also something you hear a lot and is important to know, it shows how much was traded in that candle (shows the power~)
--- TA (Technical Analysis) ---
With TA we try to predict a probability in future prices to find opportunities in the market.
Across Tradingview there are thousands and thousands of indicators available to you, we just need to focus on the biggest and most common ones for the start.
RSI
MACD
Moving Averages (simple, exponential, smoothed, and so on..)
Price trends
Support and Resistance
Volume
Start with those 6 and work your way through all of them, analyse how they work, what they mean, where they come from and you have a good knowledge for future improvements.
(yes, you probably don't need all of them, its just a good base to have)
--- Trading Terms and there meaning ---
Learn the following words and what they mean in the sense of trading:
- Long / Short
- Bid / Ask (combined with spread below)
- Crypto, Forex, CFD, Stocks, Options (Bonds, Shares, Indices...)
- Market Order / Limit Order (Stoploss, Profit Target)
- Leverage
- Margin
- Spread / Slippage (related to News)
there are a lot more to learn, but this will get you suited for the next few points.
--- Find your way ---
Find what you can do and what you can't do (some of us have family, a 9to5 job, other things) that will not let you trade every way.
Make yourself a time-table, a budget plan and then research on this criteria how you want to spend your trading-time.
(If you have a 9to5 job, you probably cant watch the chart on a minute timeframe, so strategies involving this is not suited)
--- Risk Reward ---
Calculate how much you need and with that information backtest your strategy to find out how profitable it is and then set your risk:reward ratio to the calculated risk you can afford to lose to still make the profit you need in the end.
Example: If you lose 2 trades with a RR of 1:5 and win another one, you won 3R (Lost 2 = -2R, Won 1:5 so + 5R = 3R - its not precise, as there is slippage and commissions). If you are happy with 2R, then thats the way you trade from now on.
Keep this always the same as the math dont lie but your feelins will try to betray you (thats the psyochology part that comes up next)
This point is very, very important to understand and to learn and to adapt to your circumstances. if you don't do that, you will fail no matter what!
--- Psychology ---
Well, thats one of the major points and its very, very big.
Do a lot of research on this part and also use papermoney as kind of a challenge for yourself so if you lose it, you still get "mad".
baseline is: dont have feelings! it has to be all mathematical and mechanical.
--- Paper Trade ---
Yes, don't use your own money in the beginning, you can paper trade on Tradingview for free without any risk and you can test all the strategies/indicators on this planet for free and see how they perform.
Make challenges for yourself (so psychology is also trained).
Don't underestimate this point, paper trade for at least 6 month every day 6h to really grasp what you are up to, what you are doing, how to improve everything and to get the feeling for everything!
Once you went through those points you are given a toolbelt with a lot of tools, now its time to figure out what tool to use in what situation.
Research a lot of strategies and find something that works for you.. and then melt it into something useful!
Disclaimer
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