To Learn How to Trade You Need a Plan.
Step 1: Developing Realistic Expectations
To learn how to trade it is critical to understand what to realistically expect from trading. If your expectations are out of line it will lead to destructive behavior like taking on too much risk and holding trades for unrealistic moves hoping for “the big money”
Step 2: Self Assessment Phase
Figuring out what trading style fits your personality. You can start with the Learn to Trade link. Here you can go to Trading Styles to learn about the different styles and holding times. Next, take the Trader Personality Tests and quizzes. Watch videos on the various styles in the trading videos section. Now you can figure out what market you’ll trade based on your account size, risk tolerance etc. in the Markets section.
Step 3: Initial Learning Phase – Begin to experiment with edges
Learn some basic technical analysis and common setups for free. In the Traders Resources section you will find Free Trading Courses. Try to find a course in a timeframe that you’ve determined closely fits your personality. You may decide that’s day trading or swing trading, etc. You will likely need to try several trading styles to figure out which causes you the least amount of discomfort.
Don’t discount the value of free information. I still use edges that I learned years ago from free courses. I modified them to fit me. One pullback setup I learned, for instance, I considered a waste of time. This was until I learned not to use it in choppy markets and began using order flow to pinpoint my entries. Now it’s my favorite edge for trading strong trending markets.
Step 4: Professional Coaching – Learn how to trade like a pro
Get a mentor! While you learn how to trade you can expect to pay tuition. It’s vital that you learn something for your money. Losing it in the markets and trying to figure it out on your own is probably the slowest and most expensive way to learn. You will be way ahead by paying for a quality trading education by getting a professional Trading Coach. Go to the Trading Coaches section. Find a proven mentor who trains in a methodology that is as close as possible to what you’ve become accustomed to. Here your mentor will teach you the criteria they use to successfully trade the markets.
Step 5: Trading Psychology
If you’re missing trades, jumping out of trades early, chasing trades, taking trades outside of the plan or experiencing any other self destructive behavior, you need to correct it. You can work with one of the professional trading psychologists in the Trader Psychology section. In addition, you’ll find some of the best psychology videos and recorded webinars on the web.
Step 6: Earning Confidence
Eventually with enough meaningful practice at doing the right things you will begin to develop confidence. Once you have a proven edge, confidence comes from simply being able to trust yourself. You must trust yourself to take advantage of your edges when the market presents them. Trust that you will not jump into a trade that doesn’t fit your entry criteria. Develop trust that you will not go off the rails revenge trading because you took a couple of losses. Trust that you can identify when the market is not right for your strategy and have the good sense to turn off your computer. How about trusting yourself to not move your stop or having the patience to sit on your hands waiting for your target to get hit without jumping out early?
This is confidence:
I heard a reporter ask a professional NFL quarterback if he was nervous or lacked confidence before an upcoming big game. He said, “Nervousness and lack of confidence are experienced by people who don’t know what their doing or haven’t prepared. Or maybe they have prepared but don’t trust themselves to follow their plan. I’m prepared and am confident I’ll follow the plan. That’s all I can do. Why worry about things I can’t control? Why be nervous?”
That’s the kind of confidence you’ll need to develop to be successful in trading.