Are you ready to take the next step and become a financial trader? If you have money sitting in the bank not doing much for you, then why not put it to work? Trading is something you can do from home without much equipment beyond a fast computer and internet connection.
Establish your goals
Before you start trading, think about your aims. Are you looking for an immediate source of income? Do you want to build up a fund to live on when you retire, or to put your children through a private school? Do you simply want to build up your trading skills so that you can try to get an interview with a professional finance company? Having a clear idea of your goals will help to ensure that you go into trading with the right strategy.
Establish your risk tolerance
Every trader has a different tolerance for risk – this means the amount you’re willing to lose if things go wrong. No matter how good a deal looks, you should never trade with money that you can’t afford to lose. Setting clear rules for yourself will help to protect you from impulsive decisions that could put you in jeopardy, but it’s still important to take some risks or you’ll never make any money at all. Every individual has a different level of risk that feels right.
Learn about different asset types
Even if you use a subscription stock analysis service to ensure that you get the latest information about the assets you’re most interested in, learning about other asset classes can strengthen your hand, enabling you to balance your trading portfolio and giving you additional options at times when the market is slow. Bonds are not especially lucrative but can provide stability. Forex trading is higher risk but can generate money quickly if it goes well and can be used for hedging. Property requires big money upfront but can pay off well if you make the right decisions.
Develop your skills
The most successful traders are those who treat every day as a learning experience. There are always ways that you can improve, but it’s especially important to focus on this early on – indeed, some traders choose to learn through fantasy trading before they risk any money at all. As well as familiarising yourself with the practicalities of how trading works, you will need to learn about yourself so that you can correct for your psychological biases (everybody has them) and improve your decision-making.
Follow financial news
It’s always easier to make good decisions if you’re well-informed, so you should make following the financial news part of your daily routine. You’ll need to know about global economic trends (and the political and military events that might influence them) and also about the particular market sectors where your investments are based. Don’t obsess over it, but make sure that you have good general knowledge so that when you research specifics, you can understand them in context.
Finding your feet as a trader takes time, but it can be very rewarding. If you work hard, then you’ll have the opportunity to make good money and you’ll really sharpen up your skills.