Thinking About Starting to Trade This Year? Here Are Some Things to Keep in Mind

InvestorEducation / Learn to Trade Feb 16, 2021 - 10:59 AM GMT

Have you ever found yourself hearing stories of people who make huge profits from investing in the stock market, and thinking, ‘I can do it too’? Well, you don’t have to settle for thinking and wishing anymore. Nowadays, thanks to technology, everyone can invest and trade - and it’s much simpler than you might think.

You definitely shouldn’t be afraid to give it a try. However, before taking your first steps in the world of trading, there are some things you should know about it, like what methods are highly recommended for beginner traders and which paths are to be avoided. We’ve gathered some tips and tricks that can help you get properly acquainted with this fascinating world.

Start off slow

The biggest mistake you can make, when your journey through the stock markets is just getting started, is to assume you’ve mastered the art before you’ve even invested your first pound. It takes time to fully understand how it’s done, and to get a clear vision of how the markets really work. Take your time to learn. Impatience is your biggest enemy here.

There’s no better way to start trading than slowly, with small sums. Do not invest a fortune at first, even if you feel absolutely certain about a stock’s potential for success. On the other hand, don’t be in a rush to pull out if something seems like it’s not going in the direction you thought it would. The only way to truly learn the markets is to try and err - and that’s only possible with small sums of money (at least at first).

Follow footsteps of giants

If you’re keen on learning the markets at a fast pace, the best way to do it is to watch what expert traders are doing. There are some things that they are fully aware of, which may not even occur to you when you’re just starting out, such as market trends, rush hours, misleading movements, and so on. You don’t have to mimic people, just to pay attention to their trading decisions and to try and understand them.

On the other hand, do not be afraid to go off the beaten path sometimes. A great portion of the potential in trading comes from spotting hidden opportunities and betting on them before other people do. This mixture, of following market trends and searching for your own unique path, can help you flourish.

Beware of scammers

The world of online trading is much more dangerous than it appears to be. It seems like every day, a new method used by scammers is exposed, and that these methods are getting more and more sophisticated and harder to spot over time. The crooks have no boundaries when it comes to taking advantage of novice traders and stealing their money.

One of the most common global scams known today is called a forex scam. It starts out with an online broker convincing you to deposit money into an account, promising great profit. The broker will later call you non-stop in order to get you to invest large sums. At first you will really see profit, but at some point the advice given will cause you to lose money - and a lot of it. When you realize that you’ve been tricked and try to request a withdrawal of funds, the broker will stop answering your phone calls.

Sounds scary, right? Don’t worry too much, though, since healthy intuition can help you avoid most of these frauds. The general rule is not to trade with online brokers who are not licensed. However, even a licensed broker can be dishonest. The best thing you can do is trust your instincts and treat all brokers as dishonest, unless proven otherwise. Better safe than sorry.

By S N Chatterjee

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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