6 Steps To Become a Stock Trader

Foreign.

Welcome back to my channel, guys. So recently I've been getting a lot of dms about people wanting to get started in trading. People have been DMing DMing me and asking me, hey, how can I get started? What is the proper steps? Where can I learn? Where do I open up a paper trading account? What is the paper trading account? And all these questions. So now I'm making this video for anyone that's looking to get started started in trading and has no idea where to start. So I'm going to go through a few steps with you guys and actually explain on how to actually get over the learning curve. So you guys probably saw a stock chart before. You probably heard that stocks are very, very complicated. They're very hard, but in reality they're really not. It's just like anything else. It looks hard at first, but once you kind of get into it, it becomes easier and easier and easier within time. But you have to put in time and effort to, to actually get to that comfortability. Now, starting out, these are the steps you guys should take to become a confident and successful trader. The first thing you guys need to do is educate yourselves. You have to properly educate yourselves to know the topic very well. You have to understand things such as technical indicators, price action, and some things you guys can focus on. And I'll just, you know, give it out, give it out just so you guys have a better understanding. You guys can look at moving averages, exponential moving averages, volume support and resistance, trend lines, chart patterns, candlestick patterns, technical indicators such as macd, rsi, Fibonacci retracements, things of these natures. You guys can search up these topics and look them up. What's a great way to learn about these topics? You guys can read books. So I'm gonna post a link down below of a bunch of books that I recommend. You guys can check them out and you guys can get started by reading these books. Now once you guys are done reading these books and you guys actually research these topics, go online, go on Investopedia and multiple websites and actually learn about these topics. The second step you guys can do is actually go and open up something called a paper trading account. So a paper trading account is an account where you trade the real markets with fake money. So once again, you're trading the real markets, real market movements with fake money. Now the great thing about a paper trading account is you get to get a feel of the markets without investing real money, without investing money where you're risking on losing money at this point because you have no idea what to do. So that's the great benefit of a paper trading account because now look at it, you're dabbling in the stock market, you're not risking any money and you're learning at the same time. So that's the great thing about having a paper trading account. One great platform for a paper trading account is thinkorswim by TD Ameritrade. I'm gonna put a link down below for that as well. You guys can check that out. You guys can play with the platform. I personally think the platform is great and you guys can check it out for yourself. If you guys do want to start paper trading and once you guys are done paper trading, you guys can actually convert over to a real account as well. Now something to keep in mind when you guys are paper trading, when you paper trade with thinkorswim, I know with thinkorswim they start you off with a $200,000 account, right? Make sure your account is the same size as you would start with real money. Because if you start out with a $200,000 account and you start out and then you, you switch over to opening up a real account with 5,000 or 2,000, guess what? There's a huge difference in risk management. There's a huge difference of strategies, there's a huge difference in the stocks you're touching and things of that nature. So you want to make sure when you open up the paper trading account, your account is actually to the same amount of money you're actually going to invest. So take the $200,000 that thinkorswim gets you and change it to 2 or 3,000 or whatever you're going to start off with. Just so you're kind of playing with the same numbers and you're comparing apples to apples when you do start with the real account. Now once you do have the paper trading account going on, I personally recommend that you guys start practicing for at least one to two months. So on the paper trading account, practice for one to two months, get comfortable with price movements, get comfortable with stocks, get comfortable in using the platform, get comfortable in seeing how the market's moving, how news affect the market, how news is affecting your stock, and getting familiar with things like that. And the best way to get familiar with that is by having proper experience. And to have experience is to trade. And to trade without risking any real capital is by having a paper trading account. Now at this point, you've educated yourself. You opened up a paper trading account and you've given yourself about a month to Two months, depending on how much time you need or how much effort you're putting in now. After that's done and throughout that period, the third step you guys should do is have a trading plan. A trading plan is very, very, very, very crucial in you becoming a successful trader. This is a huge thing and a huge way. Many traders actually feel fail. They actually don't do well if they don't have a trading plan. So in your trading plan, the first thing you guys should have is risk management. You have to have a solid risk management strategy. I'm going to make a risk management video as well with position sizing, but that's something you guys can look up and try to understand. If not, I will make a video on that soon. In your trading plan, once again, have a solid risk management have position sizing along with that. You guys have to have solid entry and exit points for each and every single play you make. For example, whenever you get into a trade, you have to know where you're entering. You have to have a stop loss. Very, very, very important. Anytime you get into trade, make sure you have a stop loss. Once you have a stop loss, you also have to understand how much room does the stock potentially have to run. Can I go up to 6? Can I go up to 7? Oh, is the stock at $5.40? Is it fighting resistance at 550? Things of that nature you have to fully understand. And once you guys start trading more, you guys are going to see what I mean. So once again, at this point, you've educated yourself. You've read books, you saw YouTube videos. Next step is you opening up a paper training account. You've given yourself one to two months on a paper trading account. You've gotten very comfortable.

You've set up a trading plan, the trading plan, you've applied it on your paper trading account. Now you're ready to open up a real account. Final step, you go out, you go open up a real account. Now, once you do open up a real account, how much money should one start with? Me personally, I recommend starting with, if you're opening up TD Ameritrade, for example, start off with 2,500 or start off with 3,000, 3,000. Because I know currently they're giving out a promotion that if you put in $3,000, they give you free trades for 60 days and you get a margin account. So if you have a margin account, you don't have to wait three business days for your, you know, for your money to settle. If you have a cash account, you Guys have to wait three business days for your money to settle. Settle. Which is why if you guys open up an account over 2,500, you don't have to wait three days for your money to settle. Now it's time for you to open up a real account. Now the question is, how much should I put in? Now, when you first start out, my personal advice is to start out small, put in maybe 1 to $2,000 into the market and work with that. Okay? You're not going to make a lot of money. I'm going to put that right there. If you start off with 1 to $2,000, you're not going to turn that 1 to 2,000 into a million or 100k or 200k. Very, very, very, very tough for you to do that unless you're playing with some crazy stocks and, you know, just something you want to avoid completely. You don't want to think like that. All right? So when you start off with one or $2,000, the purpose at this point is for you to educate yourself with real money. Because when you paper trade, it's completely different than real money. The reason for that is when you have real money in the market, there's more emotions involved. And I'm pretty sure you guys heard trading is 80% psychology and 20% technical indicators and skill sets. So with that being said, the only way you're gonna learn the psychological aspect, the only way you're gonna learn how you get emotional, if you get greedy, if you get fearful, is by you having real money. When you have a paper trading account, you're not going to feel any of that. You're not gonna feel any emotions. You're not gonna really care about getting up in the morning seeing if your stock is up or down, because it's not real money. If you make money, you're not going to care. If you lose money, you're not really going to care because you're not going to feel it with the paper trading account. With the real account, you are going to feel it. You are going to feel your wins, you're going to feel your losses, and you're going to get a better understanding of how much emotions actually take a play in your trading. Which is why when you start out with real money, do not start out with a lot of money. And that's where a lot of people messed up. They start out with so much money, they take big hits and they quit. If you start at one to $2,000 and you're not really putting all your money into one trade, you're putting in 500 or $600 into a trade. You're now still in the learning process, right? You're still learning. You're learning about your emotions. You're learning about actually playing with real money and how it's so much different than a paper trading account. So once you get to that stage and you are profitable for, let's say, a month or two, that's when you should add more money. Now, how much more money should you add that's on you, depending on your finances and things of that nature and how much money you can actually put into the market and not really worry about, okay, if you're putting money into market, it should be money you're not worrying about. If you're putting in money and you have to pay rent next month or something, do not do that. Make sure it's money you're not really worried about and you can actually put it into the market and everything else is covered. Now. Very, very important thing, very important thing that I want to mention to everyone. Trading is something that takes a lot of time. You are not going to start trading and make a huge amount of money right away. It's going to take a lot of time. Where people mess up is they start trading and they think they're going to make this enormous amount of money in a month, in a week, in two months, it's not going to happen. This is a game that's going to take a lot of time. For some people, it takes a few months. Some people even takes years for them to be very comfortable. So when you're starting out, have the mindset understand that this is going to take time. This is not going to happen overnight. It's a game of constant learning and improving. As you start out, put yourself in that situation of you're constantly learning and improving. Don't think about money for the next six months. If you start out tomorrow with educating yourself and opening up a paper trading account, don't think about earning a dollar from the market at least for six months, six months. Do not think about it. Don't. Even if you make money, don't take it out for six months. Just focus on working on your trades, focus on improving. And with that being said, you guys will be at a pace on becoming very good traders, I promise you. But you have to put in time and you have to be very patient with it. You can't quit after a month of not seeing results or four weeks, or for eight weeks, or 10 weeks, or 12 weeks. You have to constantly keep improving and and constantly keep going. That's what I personally think on how people should approach the market when they are starting out. I'm gonna put all the info down in the link down below. If you guys have any questions or want me to talk about any other topic or want to ask me any sort of questions, you can DM me. My Instagram is down below, or you guys can comment and I'll speak about that topic and I'll see you guys next time. Thank you so much for watching.