How many times have you heard about that person who became an expert share trader and made a small fortune, allowing them to live the good life and retire early? It’s not just an urban legend; the fact is that it can happen if you know what you’re doing and you’re willing to take some calculated risks. But how do you get from knowing absolutely nothing about share trading, to expert status? Well there are a few helpful steps you can follow that will certainly make the path much smoother.
Ask Yourself If You’ve Got the Right Skills
The first place to start is with a little self-reflection. Do you think you’ve got what it takes to be an expert day trader? Some of the top skills you’ll need are the ability to be a self-starter; you can take risks when the moment is right; you’re able to juggle multiple things at once; you’re ready to learn on a continuous basis; and you’re willing to put in some long and often stressful working hours.
Even if you only plan on becoming an expert share trader for your own gain, meaning it’s not a business or service you provide to others, there’s still going to be a lot of long hours, pressure, and work involved.
Learn All the Rules, Lingo, and Steps Involved
In order to become an expert, you also need to be able to talk and think like one, which requires educating yourself. This share trading guide from Easy Markets can act as a great tool for beginners. In particular, this guide takes a look at the differences between CFD trading and traditional share trading. Both have their own list of pros and cons that you can research.
Some of the pros with CFD shares include the fact you use leverage to increase the investment you have; it tends to be less volatile if you’re in it for the long-run; and you can buy and sell right away. With traditional shares, the transactions are totally dependent on what’s available through a buyer or seller; you will only benefit from prices that go up; and there is no leverage available.
Make Sure You’ve Got Cash to Invest
The next step is to ensure you’ve got enough capital to at least get you started. In determining how much to invest, pick a number that you are comfortable losing. Sure, that isn’t the goal, the goal is to make money, but you need to be realistic and recognise there is never a guarantee.
Experts recommend that you have at least £10,000 available to engage in day trading. So what if you want to quit your job completely and rely on your trading skills? Well the experts suggest bumping up your capital to about £100,000+.
Choose a Trading Strategy
You will also need to choose your trading strategy. Keep in mind that no matter what strategy you choose, you should be open to changes. The markets are fickle and volatile on the best of days, so sometimes you’ll need to change your course of direction.
These tips can help you on your way to becoming an expert share trader.