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First, congratulations on taking the first step – asking the question on how to get started a a trader! This shows a recognition on your part that there is knowledge you don’t have, and should acquire in your journey to becoming a profitable trader.  This takes us perfectly into the first thing I would advise:

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?

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.  If all you ever want to be able to do is trade that one system, then that’s fine.  But every system eventually stops working because the market behavior changes.  If you’re unable to adapt to those changes, then you’re going to end up on the losing end of things.

We always suggest that people study market dynamics. Learn what makes the markets move, and in what ways they tend to move.  There are certain behaviors in the market that have been observed for over 100 years and still happen to this day.  If you know about these things and learn how to exploit them, you can stack the probabilities in your favor and create a positive bias to your trading results that will stay with you regardless of market changes.

Get The Right Tools

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.  Every hardware and software vendor promises that their tool is “the one” that will make all the difference for you.  Indicators 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 most any professional trading platform will include with it all the tools you really need at the beginning.  Sure there are additional 3rd party tools that bring certain things to the table.  But if you’re looking to get 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.  I strongly suggest you know your tools.

Be Willing To Learn

I’m guessing this won’t be an issue for you, since you’re already here reading this article.  But the fact is that I’ve never met a successful trader who figured everything out completely 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.  Perhaps I’m 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.  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, then 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 too you need only wait and let price come to you.  But fail to cultivate this essential skill, and you have failed before you begin.

Be Decisive

Do you have trouble deciding what socks to put on in the morning?  Can’t decide which flavor to get at Starbucks?  Then you’re going to struggle as a trader.  Trading is largely about making decisions.  Dozens, even hundreds of decisions go into any one trade.  What timeframe will you trade?  What instrument?  Will you buy or sell?  When?  How much risk should you take?  How much potential reward is there?  When should you enter?  Seven questions already and we haven’t even placed the trade yet!

This is what you’re going to be faced with on a constant 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 will 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”.  Work on your decision making ability.  Put yourself into situations where you will have to make lots of decisions under some kind of time constraint.  Maybe find a video game (or heck, even chess!) that has some kind of time constraint 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.  As always if we can be of any assistance to you in getting where you want to be as a trader, don’t hesitate to reach out to us either in person or online.  We’d love to hear from you.

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