The 21st century is in the yard, and many types of investment are no longer as attractive as they were before. Now, as never before, a need arose for a new type of investment and making money. For many, the unknown are the international financial markets, on the site of which you can earn serious income. Their participants are traders who trade in various financial instruments in order to profit from the difference in their value. But how to become a trader from scratch?
For this, it is necessary, first of all, to equip your workplace with a computer or laptop with uninterrupted access to the Internet. Some professional traders use multiple monitors in order to obtain information from different stock exchanges. For a comfortable and convenient trading anywhere, wherever you are, there are mobile gadgets. It is enough to install certain trading platforms.
It is also necessary to provide access to international financial markets. To start trading, you need to access the trading floors and register a brokerage account.
Choosing a brokerage company
When choosing a brokerage company, it is necessary to take into account the significance of the following factors:
- The company must have the necessary package of documents allowing this type of activity in accordance with the legislation of our country, including a license.
- Of no small importance is the existence of the company, its experience and reviews about it. To obtain reliable information about the broker, you need to find the official website of the company and familiarize yourself with the conditions that it provides.
- The broker must provide access to trading floors for all types of financial instruments. For example, a client wants to trade currency, then the broker must provide access to the interbank foreign exchange market, and when trading on the gold / silver pair, to the spot market.
- Important are the terms of service dictated by the broker. They must guarantee a low percentage for leverage, minimum spreads, a small commission for operations of deposit and withdrawal of funds. Also, the broker must provide a trading platform.
How to choose a trading platform?
First of all, it is necessary to test all the proposed trading platforms. This will help the demo account with virtual tools.
All trading floors can be combined into three groups:
- Software for computers with its subsequent installation.
- Software for laptops. These are browser versions that do not have to be installed on a PC.
- Gadget Software. It is intended primarily for tablets and smartphones. Unlike the previous ones, it is limited in its functionality.
The most famous and common trading platforms among Russian traders are QUICK, MetaTrader, Web2L, Mirror Trader, Markets Trader.
Knowledge and skills
To become a trader, you must have the appropriate knowledge and skills (trading strategies). In order to develop your tactics, you need to feel the market, study all types of analyzes. An exchange trader primarily uses fundamental analysis, showing the main economic and political news. And then he considers the charts, applying technical analysis with various computer indicators. Only such knowledge, the ability to predict the dynamics of prices allow us to understand the specifics of this area of activity.
But in order to figure out how to become a trader from scratch, it is recommended to sign up for training courses. Professional brokers or managers will help you learn the basic terminology and in practice show the most successful trading strategies.
Courses of traders imply both distance learning and its full-time form. Studying at home, it is possible to get the basics of trading without losing too much time. But obtaining knowledge and information through direct communication with a specialist will allow you to communicate with other beginners and current specialists in this field, attend master classes by analysts and the best forex brokers.
To become a trader, investment is required. At the initial stage, it is recommended to start bidding on a demo account in order to understand the specifics of price dynamics, market psychology and, importantly, not to lose your money. To understand how to become a trader from scratch and at the same time not to incur losses, you must adhere to discipline in work. Profit at Forex is not Russian roulette, where there is a question of luck, it’s a strictly calculated tactic that takes into account the nuances of price movements, skills, and, therefore, discipline.
General rules for trading
Particular importance must be given to one's own organization and psychological stability. This is manifested when closing positions (it does not matter, positive or negative orders). When closing profitable operations, greed may occur. Then the Forex trader, in spite of any signals for a reversal of the trend, will continue to wait for more and more profit, which will lead to serious losses. When closing negative positions, lack of discipline, excessive worry for one’s money can also negatively affect the result.
A Forex trader is a businessman who is the only boss in his business and himself. This is the catch. Few can boast of self-discipline and willpower. In order not to lose the invested funds, you need to draw up a trading plan, which will spell out daily profits, trading tactics, and stop-loss and take-profit are necessarily indicated. This will help to avoid making quick decisions in difficult situations and will not allow greed or fear to make a serious loss out of profit.
When starting work in the foreign exchange market, all possible risks must be taken into account. The most important thing is a clear calculation and a cold mind, without emotions and ambitions.
Trading strategy concept
A trader’s school involves learning specific trading strategies. They are understood as the basic rules and conditions under which a trader performs certain actions in the foreign exchange market. Each strategy has its own nuances and subtleties that you need to know and, importantly, understand them. The choice is great, and it is sometimes very difficult for a beginner to decide. Before becoming a trader from scratch, he will spend a huge amount of time until he finds a suitable strategy for himself.
Along with the concept of "strategy" there is also the expression "trading system". All specific terms must be known to the trader. Full-time training involves the analysis of this concept in practical classes. It includes a certain number of indicators, oscillators, methods of correct entry and exit from the market. Before becoming a professional trader, you need to study these two concepts - "trading strategy" and "trading system".
Key Trading Strategies
They can be divided into main subspecies:
- trending
- flat;
- indicator;
- indicatorless;
- algorithmic.
These species are considered basic, and, taking into account their features, certain strategies are drawn up.
Both indicator and non-indicator strategies can be trend and flat. A trend is defined in two ways. The first one is based on lines that are built directly on the chart. The second - on indicators that allow you to identify the direction of price movement.
Algorithmic strategies are considered universal. They cannot be attached to one tool. They work both in trending and flat tactics.
Indicator strategies
These include trading tactics using indicators. There are standard types of them, such as moving averages, oscillators, showing the volume of transactions and participants in the market. There are also custom indicators that are being worked out by professionals. All this should be well understood by the trader. Training with competent specialists will help to figure everything out.
Indicatorless strategies
When trading using this tactic, you only need to determine the direction of the price movement, respectively, for this you need trend lines that are drawn directly on the chart. They have two bases - support and resistance lines.
Before becoming a professional trader, all beginners learn to correctly determine the trend and build lines that define it. A non-indicator strategy is a unique and interesting theory, various techniques. Their newcomers to trading should study, work out and apply to create their own arsenal of trading tools.
There are varieties of this strategy:
- Trade for breaking through and rebounding from the resistance or support line.
- Trade with figures, which are divided into figures of continuation and reversal of the trend. The latter include the head and shoulders, the inverted head and shoulders, double base, double top. The figures for the continuation of the trend are a triangle, a flag, a pennant.
- Candlestick analysis. This may include various candle patterns and combinations.
Best trading strategy
The best traders in Russia and abroad under the optimal strategy mean the one that the newcomer fully accepted, worked out and tested in practice.
There are also types of trade:
- one day trading, when several operations are performed during this time;
- short-term trading, when transactions last several days;
- medium-term trading, when positions can be opened and closed during the week or month;
- long-term trading, when the so-called investment in foreign currency occurs, and transactions can last for several years.
It is the trader’s school that will help determine the choice of their own trading tactics and teach them how to master the basic tools that are in the auction.