Some inexperienced people simply read a trading book or two and expect to make it big in the financial markets.
Doctors, lawyers, and engineers all have to go through years of schooling before they can make a living from their expertise.
Baseball players must spend some time in the minor leagues before they have a chance to play in the major leagues.
Football and basketball players usually have to go through four years of college competition, and only college players who perform well have the opportunity to become professional players.
Plumbers and welders also have to start as apprentices.
These people did not become successful immediately the day they decided to enter a profession; they all had certain steps or procedures to achieve their goals. So, is it any different with financial trading? After all, they are just beginners trying to step into one of the most difficult professions, at least in my opinion, and expecting to succeed immediately. Just like a surgeon, a financial trader has to invest a lot of time before he can expect to succeed. In fact, like any profession, financial trading also requires proper education. Unfortunately, Harvard University does not offer a degree in financial trading. Traders' expertise usually comes from their own experience, and the losses they incur can be regarded as tuition. Only through these losses can they gain the experience they need to become successful traders.
The first few years of trading should be viewed as a learning period. During this period, do not expect to make significant profits; instead, traders should focus on capital protection and training. In other words, beginner traders should view themselves as students in school. When you first start trading, you are likely to make countless mistakes because you are ignorant. It is normal to have some losses, and beginners should be prepared to accept this. Your capital should not be viewed as trading capital, but as learning capital. At the beginning, you should only risk a small amount of money, just enough for you to learn through actual trading experience.
Many beginners start out with a big punch in the face, intending to make a killing, without any preparation to train themselves to be the best traders. Remember, many successful traders have gone bankrupt, or at least experienced significant losses. Even the Ninja Turtles, trained by Richard Dennis, had losses at first, and then some of them became the best traders.
If you have ever read the book "Finance," you will remember that every protagonist seems to have gone bankrupt once or twice. Whether it is stock investment or bond day trading, it takes a lot of time to learn and gain experience, and then slowly understand the ins and outs of it. Although most beginners cannot make it through this difficult learning process, those who accept the training and do not feel discouraged still have a great chance of success.
Things traders should learn:
◇Fill in the transaction instructions.
◇Read the price chart.
◇Technical analysis. ◇Understand the trading rules of various markets. ◇How to respond to news. ◇Develop a trading system. ◇Test the trading system. ◇Develop a strict discipline. ◇Develop a money management plan. ◇Manage risk. ◇Learn how to take losses. ◇Learn when to trade and when not to trade. ◇Develop a trading plan. ◇Control emotions.
More importantly, traders must refrain from inappropriate behaviors, such as chasing the market.
◇Trading with insufficient capital. ◇Trading too frequently. ◇Letting losses accumulate into a disaster. ◇Being irrational about positions. ◇Taking profits too early. ◇Accepting too much risk. ◇Trading for the sake of excitement. ◇Being stubborn.
Financial trading is a continuous learning process, and you can’t master it by reading a book or attending a lecture. Anyone can read 5 books on tennis and take a few classes, but if you want to be a real tennis player, you must actually practice on the court, and practice continuously. The same is true for financial trading. Only by continuous practice can you slowly figure out the tricks. There may be some differences between tennis and financial trading. If you are not good at playing tennis, at least you can achieve the purpose of exercise, lose a few pounds of fat, and stay slim. Of course, trading losses can also help you lose a few pounds of fat, but that’s because you have no money to eat. Paper simulation does help, but it doesn’t reflect the actual situation after all.
No matter what you read in books, no matter how much time you spend on simulated trading, once you really enter the market, nothing will be the same. Some mistakes that you never thought of will start to appear everywhere!
The best way to prevent mistakes is to make them. Actual losses can make you realize the significance of mistakes. Only by carefully avoiding them can you avoid making the same mistakes in similar situations. Actual losses can make you feel the pain that is difficult to experience in simulated trading. Finally, when the pain is so severe that it is unbearable, you will not make the same mistakes again. Paper simulated trading is a necessary learning process. Beginners should conduct a reasonable degree of simulated trading before they can actually enter the market. Having said that, simulated trading cannot reflect the actual situation after all.
In paper trading, you will quickly forget a $1,000 loss; however, a real loss of $1,000 will often make you bleed, and if it happens on a Friday, your entire weekend may be ruined. This kind of emotional distress usually does not occur in paper trading. In other words, mistakes in paper trading do not cause the necessary pain.
During simulated trading, you will not receive margin calls, and the price of your position is the best price at the time. However, when you actually enter the market, the whole situation is different. Many things that would not happen in simulated trading have now happened: reduced risk tolerance, premature closing of profitable positions, allowing losses to continue to accumulate, slippage and commission fees becoming a real burden, etc. Many things cannot be simulated on paper; but having said that, although actual experience is important, you should still have sufficient simulated trading training before entering the market. In addition, I also recommend that you read as widely as possible. There is always room for improvement. Although I have been in the financial trading circle for 15 years, I am still learning.
transaction fee
Cost of Study
From what I have read, heard, and seen, it takes about two years for a trader to go through the learning period. During this period of learning and honing skills, the trader must pay tuition, just as a lawyer, chef, or doctor pays $25,000 a year in tuition.
Since there is no model school for financial trading, the tuition is paid to the more experienced traders, who are responsible for education or teaching. After a proper learning process, the novice will be upgraded to an experienced trader and then start to recover the tuition paid in the past. In general, beginners should be prepared to pay at least $50,000 in tuition. With each improper transaction, beginners can learn something and hope that they will not make the same mistake again.
Financial trading is undoubtedly one of the most difficult industries to succeed in. You must accumulate a lot of on-the-spot experience to master the relevant skills. Experience is the best teacher, so don't be frustrated by losses. You might as well regard losses as tuition you must pay.
The ultimate goal is to make money.
What to make money and how to make money are all about knowing yourself clearly