It’s a question that often gets asked, “How do I, a novice with no experience, get into Day Trading?” The allure of evermore market highs coupled with Hollywood films, such as The Wolf of Wall St., have captured the minds of many young whippersnappers who wish to pursue an exciting and potentially lucrative career in Trading. There are however many pitfalls to avoid if you wish to avert disaster.

Indeed averting disaster should be your mindset from the outset. It is a well known fact of life in trading that 90% of Traders will lose 90% of their capital within the first 90 days. Indeed the road to ruin is paved with good intentions. Don’t become just another statistic. Become an anomaly.

Build a Foundation of Market Knowledge

Initially, when starting your journey I think it is important to build even for your own peace of mind, a broad knowledge of both the markets you wish to endure, and the instruments you will employ. Pick up a book. Go online. Seek out the advice of those who have done it right. Ask yourself some honest, tough questions and build out from the net. In trading Defense truly does win Championships, so focus on how you will avoid losses, rather than get rich quick.

Another point to mention is that the best traders don’t focus on dollar amounts, but rather on implementing processes. Start thinking in terms of how you will execute trades and well defined strategies, not how much money you can win or lose. Do start to think in terms of risk/reward, probabilities, and percentages.

Get a Trading Mentor

They say that it takes a village to raise a boy. This is more true today than at any point in human history, given the nanny states most people find themselves in. With trading it is imperative that you find yourself a giant on whose shoulders you will stand on. You cannot simply hope to pick up a book and start driving in the Indy 500 without learning how to drive first. You will need a mentor to help you navigate the track. It is no different learning how to swim/drive/snorkel. Hand holding is a fact of life, don’t try to be a hero.

When searching for a mentor, bear in mind that this industry is rife with charlatans. Ask for a verified track record to ensure you are dealing with a true professional and not a sales master wannabe.

Finding the Right Broker to Execute Trades

Finding the right broker will have the greatest impact on your bottom line of any decisions you will make outside of placing trades. You want to find a trustworthy broker, ideally one in a local or transparent jurisdiction and who is regulated and insured.

Lastly, you want to find one with reduced fees and in today’s day and age there are many options. Compare their fees with other brokers and try to eliminate as many costs as possible.

Develop a strategy that works for you and your personality

After building your foundation of knowledge, you will need to build a true knowledge of self. Traders will often hear lines akin to “trading is 90% psychology” or “70% of traders, if given a profitable strategy, will still be losers” and there is truth in these notions. You will need to spend some time learning how you operate vis a vis the markets, and find what works for you and your given dispositions. Generally speaking, the longer your investment horizon the more passive you should be, but there are no guarantees in investing or trading.

Define your strategy based on your personality and psychology and be flexible yet disciplined. These will all become clearer once you begin placing trades. After all, everyone has a plan, until they get punched in the mouth.

Back-test your strategy

This is what truly separates the Pro’s from the Average Joe’s. You will need to spend time doing a thorough back-test to develop your statistical edge. Without an edge, you are simply a hobbyist with a penchant to gamble.

You will also need to be weary so as to not simply retrofit your strategy to previous data, but also test that it works currently and across various different market conditions. What may work in a 12 year bull trend, may not work in a bear market or sudden recession.

Work with someone you Trust

They say that trust is earned and in no place should this be truer than in trading, where scams are as common as water in the ocean. Don’t take anything on blind faith. Do your diligence and vet your mentors thoroughly. Don’t be afraid to look out for number one, and ask some tough questions. Protect yourself, lest you wreck yourself. Now go forth and be fruitful, prosperous and multiply young grasshoppers.

For free consultations on how I can help you advance your career in this treacherous but fun and rewarding business. Please call me directly at 1(888) 978 4868 (x: 03) and I would be happy to share my thoughts.

Who is Op-Ed & Forex Lens

Op-Ed is an avid trader and learner of all things life, with an inspired sense of duty to help others achieve their goals and dreams. Ed has 7 years of financial and trading experience, having both worked on the broker side, as well as prop trading and in trade support. He has also worked as a professional corporate currency trader and focuses mainly on Gold, the S&P and Forex. Ed is also interested in beginning to mentor students more formally, as he has informally over the years. He is always available to talk shop.

Call me or send me a chat now if you want to learn more about how to get started in trading or get started with the Forex Trading Room!