Trading, here’s the First steps to start

Money.it Newsroom

24 Gennaio 2023 - 09:55

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Many start this activity "blindly" without knowing where to start and how to start.

Trading, here's the First steps to start

Trading has become an activity which, over the years, has captured the interest of many people who, for various reasons, have no real understanding of the business of trading, partly due to loose misconceptions about the nature of "bettor" of the trader, and for the numerous films released where the figure of the trader has been exchanged for that of the broker.

Another reason you get the wrong idea about this job is that there are so many variations: the trader market maker, the energy trader, the prop trader, the portfolio manager, etc.

However, all the variants refer to negotiation on the financial markets. It therefore follows that the first approach to this activity is "everything all at once", with two clicks on the mouse, a basic technical preparation and a course where a method on how to make money is explained: you start trading right away to get rich quickly.

Obviously this is absolutely not the case. On the contrary, the trader’s job is a job with constant training and updating, but above all experience and working method make the difference in the long run. It follows that you need a certain awareness in understanding your limits and relate them to the vast world of financial management on the markets. Let’s see together what the first steps should be that an aspiring trader should take to start training seriously on the markets

The right approach to get started

The approach with which you start a path of any kind is a fundamental part of the final result. A approximate and not very serious approach will inevitably lead to a bad result from every point of view, following the abandonment of the activity almost immediately with the annexed denigration of the profession and of all those who they perform.

Unfortunately, most of those who start this business start it with the wrong approach, manipulated by the false belief that "trading makes money fast", with false gurus who promise miraculous trading methods and operating strategies simplified as much as possible.

First of all, we must say that trading is not for everyone: you need passion and curiosity for the financial world. In addition, you need to have the awareness that you are entering a huge world where information is everything, meaning that the more you want to learn, the more likely you won’t be swept away like most who start with a simplistic approach.

Another fundamental element is that of humility, especially towards oneself since, at least initially, it will be necessary to become aware of one’s total ignorance in the matter, something that not everyone is willing to accept.

So we can say that a humble approach to the subject, also characterized by a certain curiosity and a passion for this world "unknown" to most people, is an approach that could lead to long-term results unlike those who start with the "everything now" approach.

Study and practice

Given the first characteristics of the aspiring trader, essential to proceed constructively along this path, let’s see what he should do.

We can compare an aspiring trader to a small child who has started to become aware of his senses to discover the world: he touches and feels everything around him and learns by experiencing the surrounding world. Well, the aspiring trader does the same within the financial world, therefore he will find himself faced with a myriad of information and only his curiosity can push him to become aware of his limits within the world of finance.

At the beginning, one must be confused and curious. Then, what we define as the study phase of the environment occurs, i.e. the study of what trading is, what this activity consists of, what types of trading exist, how a financial market works, what’s its use, its purpose etc.

Once you have studied the basics of how a financial market works and what a trader does, you will move on to the experience part, which is essential for any training course. Precisely the operational part will be the mirror of the quality of his training, a sort of "final test" of the work carried out.

The approach to error

The aspiring trader has now moved on to the practical phase, which will initially put the trader to the test as he will see the results of the work done with the study. Said in these terms it might seem that extensive training work can lead to good results, but in reality this is not the case.

In the operational phase, in addition to one’s own personal limits of various nature (also psychological), one will mainly see the quality of the work performed. The world of finance and investment is so large that it is not easy to select the best information to learn a certain type of job. Precisely for this reason, especially at the beginning, knowing how to see the operating error as a "positive message" is essential.

Error therefore always involves a correction and sometimes, to correct a mistake in trading, one will have to be very wrong. Identifying an error in trading is not easy, as in most cases, before carrying out an operation, you think you are not wrong as "everything is calculated beforehand", but the result is usually disappointing, especially at the beginning.

Let’s therefore imagine that we act having calculated everything in advance, thus thinking that we have done the "right" thing, only to then have as a result a loss-making operation, or worse still, several loss-making operations. Unfortunately, the difficulty lies in identifying the error. This phase is psychologically trying, tiring and only those who are armed with patience, passion and curiosity will be able to go ahead and achieve success.

Original article published on Money.it Italy 2023-01-24 08:56:00. Original title: Trading, primi passi per iniziare

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