Global markets attract not only large and small investors, but also speculative ones, and most people throw money into various investment instruments without understanding how they work. Therefore, they are unable to correctly estimate the amount of risk of loss that trading in a given instrument entails, either its potential for future return. Instead, they chase after hot tips that are not verified and count losses on their trading accounts. A better and safer way is to learn to trade in the markets with the necessary skills and sufficient respect.
To become a trader, you need to be educated
Not everyone who buys and sells shares is a stock trader, at least in the nuanced language of the investment terms. Depending on how often person buys and sells stocks, most fall into one of two camps: traders or investors.
Probably the businessman's best-known image is Leonardo Di Caprio in Wolf of the Wallstreet, but the reality isn't as simple as the movie. Trading/investing is usually a long distance run, traders buy at regular intervals and sell much less often - or not at all and hold the purchased assets until retirement. But knowledge is needed for that.
You should know what you are doing before you make your first trade. The right literature will help you with that. Get in the habit and include the financial sections of the Wall Street Journal or the Financial Times in the list of daily reports you read to help you find your way around the most important topics in the beginning. If you prefer the digital world, sites like Bloomberg.com, Investing.com, Tradingview.com, but also CNBC.com are suitable. Not only watch the daily reports on the economy and the price movements of important instruments on the stock exchange, but gradually try to focus on a closer look at the individual shares of companies, commodity prices, their history and outlook. All of this will help you better understand how financial markets are behaving and under what circumstances the prices of individual instruments move up or down.
High quality literature is the ground
As a part of preparation, you should invest in the purchase of quality literature. Buy books that will introduce you to the world of trading and give you a deeper look at how to get started, be able to control your emotions at the first swings, but not panic at the first sales. Beginners will certainly appreciate the book Price Action by the author Ludvík Turek, who has 15 years of experience and offers beginnerswo practical recommendations and proven tips. Benjamin Graham's book The Intelligent Investor will help you avoid fundamental mistakes in investing.
And remember: trading is not easy, but you will gradually learn how to work with vast amounts of information and find that 70-80% of successful trading seans are key aspects of trading, such as trading psychology, proper emotion management, risk management, money management, and a number of other factors. It is important to be patient and not be discouraged.
Get inspiration from successful investors
We can learn a lot from successful investors and their experience. At the same time, they all have one thing in common - the rules. If you don't have your own investment rules yet, get inspired by people who are already successful in the investment world. Major investors like Warren Buffett say you should focus on the basics and quality of management before you start looking at a stock price. Buffett is considered as the most successful investor in history. Another person which you can be inspired by, is Dennis Gartman, who publishes daily commentary on global capital markets.
Listen to podcasts and watch videos
For some people, audio or video content is considered as the most useful source, so you can find a section of educational videos on broker websites. But you don't have to target the broker's sites right away. You can find a number of useful videos of this topic on Youtube with resources from around the world, including institutions such as Harvard, MIT, Oxford, Princeton, Stanford and even Yale. If you want to get access for an education online and for free, the daily live webinars (in English) organized by FXStreet can also be a good choice.
Be sure to include CNBC's Mad Money with Jim Cramer or The Investing for Beginners Podcast as one of the things you need to see and hear.