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Trading Education

Five Steps to Becoming a Profitable Trader

by Stock Navigators Team, March 2022

8 min

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Your First Steps

First, congratulations on taking the first step – asking the question on how to get started is truly the beginning of your journey. And it also shows that you’re ready to begin and learn - which is an important skill to have as a trader!

That’s why today, we’re going to be offering you our best advice on how to get started - and give you the opportunity to learn from some of the most popular mistakes beginner traders make when first starting out.

So, let’s get started…

Get the Right Education

We live in the information age, and it’s never been easier to learn things. At the same time, many people think that all they need to do is watch a few YouTube videos or read a few eBooks and they’ve got all the knowledge they need to make a fortune in trading..

Imagine if people applied that thinking to being a doctor, lawyer, firefighter, or nearly any other profession. Seems crazy doesn’t it?

But when it comes to trading, part of the challenge is that there’s no one-size-fits-all way to trade. If you learn a “trading system” from someone, then you are only learning that specific system.

You aren’t actually learning how to trade - and there’s no promise that the trading style they’re pushing is the best for you.

And if all you ever want to do is trade that one single way then that’s fine. But every system will eventually stop working because the market will always change its behavior one way or another. So, if you’re unable to adapt to those changes, you’re going to end up on the losing end of things after a while.

That’s why here at Stock Navigators, we’re all about education and teaching our students a dynamic approach to the market. So. no matter where it heads next, they can adjust their trading style.

Here’s some of the things we suggest: learn what makes the market move and how it moves. There are certain behaviors in the market that have been observed for over 100 years and still happen to this day. And if you know about these things and learn how to take advantage of them, you can stack the probabilities in your favor and create a positive bias to your trading results that will stick with you regardless of market changes.

Another thing we encourage our students to do is figure out what technical indicators work for you. What charts do you enjoy reading? Do you like price action? Support and resistance?

These days, trading your own accounts usually means trading from a personal computer. We live in a golden age of personal technology and there’s never been more options available to us. But this also introduces a lot of confusion over what to buy and what to use.

Get the Right Tools

All of this is part of your growth as a trader - but it’s crucial to learn about yourself because the market's going to continue to be volatile and you need the best laid plan to take advantage of it.

Every hardware and software vendor promises that their tool is “the one” that will make all the difference for you. Indicator vendors in particular preach that their indicator is the “holy grail” and generally have lots of pretty charts and graphs to back it up.

But how do you know what will actually work for the long term, and not get trapped into the never-ending search for the next tool?

The fact is that almost all professional trading platforms will give you all the tools you really need at the beginning.

Sure, there are additional third party tools that will bring certain things to the table and make your life easier… But if you’re looking at just getting started on the right foot, then you should keep it simple.

Get a decent computer running a solid platform like TradeStation, ThinkorSwim, or NinjaTrader and learn it inside & out.

TradeStation in particular is outstanding with the amount of free educational material they have at TradeStation University. But there is tons of information out there on all the major platforms - and it’s all about the one that serves you best.

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Be Willing to Learn

This may not come as a surprise, but no trader in history has ever achieved success entirely on their own.

At some point, they all had to learn from someone who had gone before them – even if that’s just in the form of reading a book and implementing the information.

More often though, at some point in their journey they found a mentor. Someone who was at the level they themselves aspired to be – or was at least several steps farther along the journey.

When you find someone who has the results you want, and is willing to share that knowledge with you, take advantage of it. There is no better investment than in yourself, and buying knowledge will always get you where you want to go faster than figuring it out for yourself.

And perhaps we’re biased, but I happen to think we at Stock Navigators offer just the sort of program that traders of all levels will benefit from.

If you want to find your way in the markets, we would be proud to help you learn to trade the right way.

Be Disciplined

One of the main traits every successful trader has in common is discipline.

Without discipline, traders overtrade, trade impulsively, revenge trade, and make all sorts of other mistakes. But with proper discipline, they wait patiently for their trade to set up, execute it with appropriate size and risk, and manage it through to completion and ultimately make profits.

A trader without discipline is no different from anyone else who wants to excel in an extremely challenging field, but refuses to follow rules or apply a consistent approach. They will inevitably fail.

For example, it is much easier to be patient when you know what you are waiting for. If you know exactly how supply & demand work, and you can put the correct Buy and Sell Zones on your charts. By knowing this, you don’t need to do anything more than wait for price to reach your zone. Then, and only then, do you act on the trade.

And if you know where you should be placing your targets for maximum profitability, then you only need to wait and let price come to you. But fail to cultivate this essential skill, and you have failed before you even begin.

Be Decisive

Do you have trouble deciding what socks to wear? Can’t decide what to get at Starbucks? Always wondering what you want to eat and taking two hours to settle on something you’ve already had three times this week?

Then you’re going to struggle as a trader.

Trading is about making decisions. Dozens, even hundreds of decisions go into any one trade. What timeframe? What instrument? Buy or sell? When? How much risk should you take on? How much potential reward is there? When should you enter?

That’s seven questions already and you haven’t even placed the trade yet.

This is what you’re going to be faced with on a daily basis as a trader. An endless stream of decisions coming at you and needing to be answered. Sometimes you’ll have time to think about the answers. Other times, you'll have to make a decision in a split second.

If you’re not able to react quickly to changing conditions, the market will gladly take your money away without even so much as a “thank you.”

So, work on your decision-making ability.

This is where simulated trading will really come in handy - because it allows you to be put in those situations without all that risk.

But if simulated trading isn’t for you - you still need to put yourself into situations where you will have to make lots of decisions under some kind of time constraint.

Find a game that has some kind of time limit where you must decide and act quickly. Whatever you do, make sure you get very good at quickly analyzing situations, deciding on a course of action, and acting on it.

This will serve you for as long as you stay in the markets.

So there you have it, five key components to getting started as a trader. And whenever you feel overwhelmed or lost, no worries - Stock Navigators is always here to help you out anyway we can.

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