In this article the most serious mistakes that those who approach trading should not make.
Trading online is a very particular job that requires the acquisition of theoretical and practical skills of a certain level. Being a job where the execution technique of the job is decisive in the long run, every little mistake could be decisive in the learning process. In this sense, those who initially approach trading always make the same mistakes, gross mistakes which in some cases also jeopardize the continuation of the learning process.
Basically, by always making these mistakes, there is the risk of quitting immediately, also as a consequence of a loss of money which can be more or less substantial, as is normal in a job where money management is key. In this article we will see what are the most common mistakes that are made when a beginner takes his first steps in the world of trading.
Initial study and lack of overview
When we talk about trading online, we are basically talking about trading within the financial markets. In practice, since it is a job, the beginner would have the duty to read up on the type of work that will be carried out, which typologies of trading exist but above all he will have to read up on the trade of the trader. What does a trader do? Where do traders work? How many types of trading are there?
These questions must be answered, otherwise the beginner will never know, even ideally, what to do and how to do it. Furthermore, another crucial point is to have basic finance notions, very useful for starting to build an overall vision regarding the structure of the markets and their functioning. It is mainly a question of building an initial scaffolding on which to work to have knowledge that can make this profession tackle in a serious way, in the most professional way possible in order to obtain a result.
Many approach trading as a side gig, or they approach it with a playful spirit, which is highly discouraged if you don’t want to lose a lot of money in a short time. Have you ever heard someone say that he wants to be a surgeon to "round things up", or just for fun?
This does not happen because we know that to be a surgeon we have to face an arduous, long-lasting study path that requires a lot of dedication. This should also happen in trading, but it is not the case most of the times. This is because opening a trading account and making the first order in the market is extremely easy. If only one knew the degree of expertise required to do this job, many would’t even start, avoiding needlessly losing money. Basically, before opening a trading account, we need to know what trading is and above all know what environment we are operating in.
The lack of operational structure
Many, after studying and having an idea on how to trade, have the desire to experiment. This desire to experiment translates into opening a demo account or a small-cap real account. At this juncture the beginner trader focuses on making money systematically, so as to be able to reach the goal in the shortest possible time. This step is normal but the approach with which it is done is fundamental.
At the beginning, if the intent of the aspiring trader is to make money immediately, we will face an almost certain failure, but why? This is because in this training step, after having carried out some operations and having seen that sometimes you gain and sometimes you lose, you need to monitor and study the trend of your operations.
In practice, one should stop, analyze one’s "track record" and try to understand where one can improve and thus follow an operating protocol that can lead to an improvement in risk parameters. This means that the trader will have to think about it every time he sees a hitch in his path, be it a substantial loss, an oversight on a missed opportunity, or even earnings beyond the expected (it seems paradoxical but it is). In practice, if the trader monitors his activity and takes steps to improve it, then there will inevitably be improvements. Unfortunately, in most cases, this does not happen and the aspiring trader will be faced with periods of very frequent ups and downs which will be unsustainable in the long run.
Everything and immediately
As you can see, it is not an "everything and immediately" kind of job. In reality there is no job that can satisfy these requirements in terms of earnings and time. Unfortunately, the lack of patience is decisive in failure in this job, a job that requires a lot of time to be learned in the best way, but above all a lot of time in structuring one’s own operations that can be fruitful in the long run.
The lack of patience is therefore an element that leads to almost certain failure in this activity, patience in obtaining fruits and patience towards oneself to understand how one must work. A large dose of passion distinguishes those who continue this path and those who stop immediately, we can safely say that patience comes from passion and that these two go hand in hand in this path. Basically, anyone who starts out with the illusion of big gains in a short time, without a minimum of passion for the subject, is inexorably doomed to failure.
Original article published on Money.it Italy 2023-02-24 08:57:00. Original title: Trading online, gli errori da evitare se si è principianti
