Well it takes patience to learn trading. If you are doing it part-time i.e mainly devoting time during the weekends, it will take even longer. If you are persistent through one boom and one bust cycle, you will learn it well in around 10years time frame.
I will divide your learning journey basically into four main parts :-
PART 1 : Read and Learn from other’s experiences
You should really educate yourself. Start with this. And before you enroll with any broker, learn the basics first.
The game of trading can be approached in two main ways: either you want to gamble with your money, or you want to transform trading into a mean to acquire your financial freedom that will last you a lifetime.
So, the first thing to do, before doing any research or going any further, is to have the right mindset. Then you can start working on the other aspects of trading.
PART 2 : Do paper trading and learn some more
After reading so many books you will be tempted to make some real money. But what these books have not taught you is how to handle your own emotions. For example, when following real life situations happen, like breaking news, company results, elections outcome, RBI meet, Fed rate hike then many other factors will start playing a in your head and will confuse you. These are over and above the knowledge of basic entry and exit signals that you need to learn to manage.
Again do some preliminary search and you will find some excellent books on the subject of Psychology of Trading.
PART 3 : Try with some small amount of money for 1 year
While doing this you should track percentages only. Don’t worry about the total amount of money made. Just focus on learning, keeping your losses small. Survive for 1 year with your starting capital for next day’s trade. It may sound simple, but many people don’t last for an year, without pumping in more money to their trading account.
Here, you will learn about the practical nuances of the markets, such as :-
- reasons why stop loss order is not triggered,
- gap up / down openings and it’s impact on overall position,
- Market wide open positions do not allow you to take new positions,
- spread between stock prices and its futures can swing to such a high level that you are better off leaving that trade, etc.
PART 4 : Learn to trade less and enjoy life !
After all this, you will now start developing a knack for what works for you. This is your sweet spot.
Don’t ignore it and try to avoid learning everything else that is possible. Just focus on what is working for you and if that means trading less, do that. This will give you more time to do things that you enjoy. Now is the time to reap the rewards of that long learning journey of investing !!
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