Things to know before first trade

[deekar]

Thanks for the great information:thumb:

 

[Paul Cruza]

In simple terms- I think every trader should learn all of the following, inside out:

Learn to lose (taking a necessary loss)
Be able to read charts fluently
Skilled in technical analysis
Skilled in fundamental analysis
Understand how different markets affect each other
Know what effect different news has on a currency and how important it is
Understand the underlying factors which drive price
Have 100% self control over yourself
Able to think of trading systems
Able to test trading systems, realisticly and not be biased
Know how to manage risk
Understands the importance of money management
Know when to stay out of a trade
Knows when to enter and exit a trade, and how to limit losses
Able to master one's emotions and psychology


Converesely, it's also just as important for traders to know what not to do. See below what traders shouldn't do:

Being too proud to close out for a loss
Trading because of the buzz it gives
Over-leveraging and putting too much risk on the table
Closing out a winning position too early
Trading with a small account
Feeling you always have to be in a trade / over trading


In each of those points above there is a massive wealth of information to digest and to learn, and it's for that reason why trading is such a complex business. It's a learning process which will continue for the rest of your trading life; every true trader never stops learning.

Practice makes perfect, and trading is no different.

 

[DanPickUp]

Dear Paul

Very nice post and indeed each point hides a massive wealth of information to digest and to over think. :thumb:

One point you may have to add some more information too: Trading with a small account

Why not? What is the problem with that? Do we need big money to trade or do we need knowledge about low margin strategies to trade?

If you trade in India, then the above questions may are not relevant but if you trade in other places, where hedge strategies are taken in account, this questions should have an impact on that specific point.

Good trading

DanPickUp

 

[rampalp]

thanks a tonne! will read more.