I think that you have arrived at one of the most important and also for you most helpful pages. This site will be able to offer you an enormous added value on the subject of “learning to trade”.
If you really want to take trading seriously and professionally, then take the time to read and understand this article completely!
This will set you apart from the crowd of traders who want to learn how to trade within a few days.
General information about learning to trade
We have thought for a long time about how to shape this very important topic. What is really important when learning to trade? We have decided to pack the learning to trade into a multilevel instruction. So you have a guideline you can stick to!
Because many trading beginners lack a good guide, especially in their initial phase. We have noticed that the basics are often lacking and that is why learning to trade is so difficult. We would like to work against this problem. If you take the knowledge from this article into account, then little can happen to you while learning to trade.
Be open to new things and you will learn more
At the beginning we would like to draw your attention to something. As you surely know, we sell products for trading education as well as software for the daily trading routine.
With that we do not stop behind the mountain. There are few people who can’t understand this at all. It is quickly said that no profitable trader has to sell a training.
This is not only complete nonsense, but also shows that people with such views usually cannot trade successfully. Why?
Because they do not show one of the most important characteristics for successful trading: They often lack differentiated and non-globalized thinking skills.
Procedure “Learn to trade”
Phase 1: Getting rid of your arrogance
We think it is absolutely important not to have a coach from the very beginning who explains everything to you as an absolute trading beginner. The important thing is that at the beginning you collect your own experiences for a short time. That way you will reach a point where you realize that initial profits were rather pure luck.
It is important to get to know the hardness and mercilessness of the market. For this purpose you should at least have lost money on a demo account.
Many trading beginners already start their first steps on a real money account. This may reinforce this necessary experience, but it is not mandatory. You should first realize that learning to trade is not a process of a few days! It takes time, experience and diligence to go from luck to systematic.
So it makes a big difference at the very beginning if you make such personal experiences. Of course you can also hear such things from a coach. But only when you feel these things yourself, feel the emotions, you internalize them.
Phase 2: Learn the principles
In the second step it is important that certain principles are understood. Among other things, these principles form the foundation of your trading! Many traders are unsuccessful because they do not know important principles and therefore have a completely wrong idea about trading!
The most important principle that you should have internalized from the beginning is
Trading is dealing with probabilities!
You have probably heard from many traders that we all trade only with probabilities. But the problem is that most of them say this, but have not internalized it in the slightest. Because this important principle leads to the following conclusion:
The outcome of a trade for me is random!
As soon as we trade with probabilities and cannot predict prices, we have to accept that the outcome of a trade is random for us.
The law of large numbers
Of course, courses do not emerge by chance, but by supply and demand. However, we have no or very little influence on this course setting.
By means of strategies we attribute a certain probability to the outcome of an individual trade. But even if the probability of our strategy is positive, the individual trade will always be random.
And this is where the law of large numbers comes into play, which we absolutely must observe when learning to trade: The outcome of the individual trade is completely irrelevant, as long as it is still within our risk control!
Because it is only through the large number of trades that I will be able to exploit a certain probability.
To clarify this I like to use the following thought game:
Suppose I roll a regular die 100 times. For every 1, 2 or 3 you roll, you will receive 110€ from me. With every 4, 5 or 6 thrown I get 100€ from you.
Would you make that bet? I hope you would! Because with this game you have a clear advantage and after 100 rolls you will most likely go home with more money.
In this game it will also happen very often that I roll the 4, 5 or 6 and therefore get money from you. In other words: You will lose in the short term! In Trading it is the same! Trading is a long term game – no matter if you are a daytrader, swing trader or position grader.
As I said: Many traders know it, but they do not see losses as what they really are: part of the game!
As a result, these traders get angry after a loss trade and even think that they must have done something wrong.
Trading is not a short-term game!
So you should internalize this insight after the first step. Write it down in your own words and really understand what it means for your trading.
Once you have done this, you will be a big step further and will make learning to trade much easier than many other traders!
One of the best sources for beginners can be found on this website – it’s an ebook that explains all the basic knowledge and principles of successful trading especially in the field of cryptocurrency markets.
Phase 3: Who are you and where are you going?
After you have understood certain principles, you need to find a trading style. So: What kind of trader do you want to be?
Because strictly speaking there is no such thing as “learning to trade”! Trading is a big, big umbrella term and includes different variations of trading. From the point of view of the different investment horizons one can distinguish between day trading, swing trading and position trading.
It is true that up to a certain point you can create a foundation and learn principles that are important for all trading styles. However, in the third step of the learning to trade process you should decide in which direction you would like to develop further.
Because in this step it is important to acquire strategies to be able to trade “right” for the first time. This can happen in the demo account as well as in the real money account.
Phase 4: Learn your strategies
In the fourth step, it is now a matter of acquiring trading strategies and thus being able to start “real” trading. Trading strategies are the means to make money from the market in the long run.
However, the problem is that most strategies that are declared as such are actually no strategies at all.
Most of the time, invented trading ideas and setups are called trading strategies. We have made the experience that almost no strategy, which is explained in the internet or in books, is actually suitable to pull money out of the market in this form.
I myself know the feeling when you hear about an SKS formation for the first time and believe that you can be successful in the long term, because now “concrete” rules are in place.
But I can assure you that a few rules for a chart technical formation are by no means sufficient to be among the winners of the market participants.
As a beginner you cannot know what you need to know!
If you are new in the trading business, it is very difficult to find serious sources and information. Because you are new to the business, you do not know what you need to learn to trade.
Therefore, it is difficult for a trading beginner to get along and get on the right track without help from outside. Almost every other profession has to be learned with the help of other people, in an apprenticeship or a study.
Learn to trade: Time and price aspects!
Now I would like to talk about the time and price aspect of trading. By time aspect I mean that if you want to learn and do day trading, for example, you must also have time for day trading. This means that you have to follow prices during the day and need the time to react to them.
If you want to learn how to trade, you should also decide on a trading style that you can actually practice from the time aspect.
Otherwise, learning to trade becomes difficult. Because in the end I would learn a trading style that I cannot practice in practice.
Day trading after work for 2 hours is not a good idea and a big mistake of many trading beginners. For professionals, we therefore recommend learning swing or position trading.
In this first step of learning to trade, make it clear to yourself which trading style you want to learn!
The right starting capital for trading
You can see that many people are undercapitalized and trading on the markets. It’s important to trade with a capital that allows a reasonable risk and money management.
Even if you are just starting to learn to trade and are still in the early stages, you should know that you will not have much success if you start with too little capital and constantly have to make compromises.
Many traders who are just starting out either don’t have enough capital to trade or are not ready to give up more money.
This is perfectly normal and I just don’t want to advise you to use more money than you want for trading. Nevertheless, you should know that a trading capital of 1000 Euro is just enough for a reasonable risk and money management.
With 1000 Euros and the microlots currently available at many brokers, you can stop 100 points in the Dax if you risk 1% of your account. So make sure at the beginning that you do not come up with too little ammunition in real money trading.
Only as soon as you feel safe on a demo account and want to get to know the difficulties of psychology, you should start learning to trade on a real money account.
The right broker
The first thing to be clear is what instruments you are trading. When trading futures, you might need an account balance of at least €50,000, depending on the broker platform. With Bitcoin futures it doesn’t matter, there is hardly any minimum stake, so you can start with round about 1 USD.
Consequently, futures – with the exception of bitcoin futures – are not recommended for most trading beginners due to the capital requirements – especially not for learning to trade.
Especially for trading in swing and position trading we recommend trading CFDs. The contract size is much more customizable with these instruments and therefore ideal for most people who want to learn trading! Regarding cryptocurrencies, there are numerous brokers out there, here is a good site that will help you with your broker choice in case you want to trade Bitcoin and altcoins on margin.
As soon as you know which instrument you want to trade, you can start looking for a suitable broker with this guideline!
With a broker you should make sure that he works seriously and offers your instruments. If you have decided to trade Bitcoin CFDs or Forex, it is important to make sure that it is a no dealing desk broker.
Being “right” on the price movement
I would now like to turn to the point of being right, because many traders believe that professional traders often have to be right.
Most trading beginners who want to learn trading think the same way.
However, once I believe that being right is an important criterion for trading successfully, I will take the wrong path in the process of learning to trade and will probably entrust myself to the wrong traders.
In the end, a (good) hit rate is only secondary. In my opinion it is much more important that you limit your losses as much as possible and let your winners run as well as possible.
As soon as the ratio of your average losses and your average winnings fits with a corresponding hit rate, you will earn money by trading.
So remember that being right has no place on the stock or cryptocurrency market. I know that as a newcomer to the markets and trading it is hard to imagine.
Learn to trade with the right trading strategies!
Another right attitude to learn to trade is to look for trading strategies that have profitable statistics.
Many traders either have no trading strategy at all and therefore trade what they think they see or what they want to see. Other traders have a trading strategy that does not have a positive expectation value.
Often it is also the case that traders know a basically successful trading strategy, but use it incorrectly, because they do not know the trading strategy well enough and the corresponding statistics are completely unknown to them.
A well-known example is the Open Range Breakout strategy. Many traders know the basic idea of this trading strategy and therefore believe that this is enough to be able to trade successfully.
The problem is that they do not know the statistics of this trading strategy. By this I do not necessarily only mean the payoff ratio and the hit rate, but also statistical requirements for this strategy.
Pay attention to sufficient statistics
For this reason, professional traders will only trade a trading strategy if further statistical information is known (for example: what days of the week / times of day / months is the trading strategy particularly good / bad; how profitable is it when trading against a trend / with a trend, etc.).
I know that many people who want to learn to trade are eager to get started quickly and would prefer to start with real money right away. I also don’t want to slow these people down and stop their momentum!
However, you should always know that long-term profitable trading only works if I know how and when my trading strategy works.
Important: You are still learning how to trade!
Now I would like to recommend one very important thing to you, which you should always keep in mind.
It is extremely important that you are aware at all times that you are in the process of “learning to trade”. So do not expect too much from yourself.
It is impossible to immediately show a professional trading style. Furthermore, you should not be frustrated or angry with yourself when you make losses and mistakes.
The process of learning to trade should therefore be seen as a normal training, in which you also have to deal with constant new experiences and learning progress.
Do yourself a favour and make learning to trade as easy and relaxed as possible.
Without a coach you are your own teacher with your own training program. So don’t be too hard on yourself!
It may sound redundant to many, but I think that most trading beginners put themselves under too much pressure. Many want to become profitable far too quickly.
Learning the trading plan while trading
Most traders know what a trading plan is and most importantly, they know that a trading plan can be very helpful. But only very few traders have actually written down a concrete trading plan.
As soon as you create a trading plan and write down the points mentioned below, you set up rules for your trading and an actual plan of how you want to trade and how your trading should be structured in general!
Not only for the process of learning to trade but also as a profitable, experienced trader you should have a trading plan!
Which trading style do I follow?
Define whether your trade should be day trading, swing trading or position trading. This way you prevent the following phenomenon, which is often seen by beginners:
You actually want to do swing trading and your trading strategies are only designed for that. But since you are currently sitting in front of the charts and recognize a supposed opportunity for a short intraday trade, you want to take this chance and make this trade, although you have no preparation and no knowledge for such day trading matters!
However, as soon as you define which trading style you want to follow, you have to stick to it and do not make any exceptions!
Which trading strategies do I use?
The answer to this question is almost the core of a trading plan. This way you build up a solid repertoire of trading strategies and don’t get tempted to trade other setups that may be unknown to you.
So-called “spontaneous trading” is thus avoided!
Which markets do I trade?
It is also important that you write down which markets you want to trade. This way you can plan exactly which markets are interesting for you and which should be under constant observation!
Only those who know their markets and know how they behave can trade these markets profitably! If, for example, you are not familiar with exotic commodities (such as soybeans or pork sides) and you don’t know which market participants are lurking there, then you will find it difficult to trade these markets.
But as soon as you know exactly how liquid or volatile a market is, how it can react to certain news and what its daily price fluctuations are, then you suddenly have completely different requirements for professional trading!
What do my routines look like?
Then it is also important to mention that you are thinking about your routines. Routines make you more confident and focused in your personal trading.
With checklists you can easily work through certain routines and thus avoid many mistakes. For this reason I can only recommend that you create checklists for many procedures, with which you can work through the individual points one after the other.
Here is an example for the procedure trade opening:
- How is the current news situation? / Are there any news to be expected in the near future that could have a strong influence on this market?
- Is the trading strategy correctly applied with this trade?
- How high should the risk for this trade be?
- Immediate entry of the trade into teamjournal!
- If necessary, set price alerts, which then require further management activities for this trade when reached
Learn 6 extremely important points for trading!
1. less is more!
In the most diverse aspects of trading, there should always be one principle close to your heart: Less is more.
Especially when trading charts, you should make sure that you do not overdo it with the various drawing tools, indicators and oscillators.
A perfect chart view is worth a lot more in trading than a colourful, spectacular chart! But it is not only in the area of charting that you should follow such a principle; it is also worth a lot in your general trading style and trading strategies!
Because here too, you should be careful with complexity. A trading strategy that is kept simple and easy to understand will help you to learn trading in the long run.
2. You want to make money, nothing else!
There’s only one thing that matters in trading: Making money. Forget everything else and concentrate on learning how to trade, just concentrate on increasing your trading account.
Other things like being right do not bring a single cent on the crypto market and should be completely eliminated in the process of learning to trade.
How often do you hear sentences like I knew it or I thought that the DAX makes this movement. Such sentences do not bring you further, however, if you have not entered for fear or other reasons.
In the end you don’t earn money with being right, but only with clean trading. And for clean trading you don’t need a crystal ball or psychic powers. Please keep this in mind if you want to learn how to trade – everything else is gimmickry!
3. it is about you, not about the others!
Very important: It is about YOU earning money and not what the others earn or what the others do. At the same time you should not care if other people tell stories about their great crypto market successes.
If you pay attention to this talk, you’ll only end up bothering yourself with it. Because most of the time, the braggarts among traders are those who have not yet found a profitable trading style and use every little profit as an opportunity to praise themselves to other traders.
I have also often experienced that exactly these people still learn to trade or have broken off the process of learning to trade because they did not know how to do it best.
4. you don’t need to know everything!
I can still remember my early days when I started learning to trade, and I know exactly what big issues I was facing.
I had absolutely no idea and had no one to tell me what was important and what I didn’t need to learn for trading.
Many beginners feel the same way as I did back then and they start to learn about the most diverse and complicated areas of trading. But the problem is that this is absolutely not necessary.
A broad knowledge of the various possibilities in trading is all well and good; but for professional and profitable trading it is more relevant that you specialize.
Therefore, try to become an expert in one special field and expand your knowledge in this small area of trading.
Even when you start learning to trade, don’t think that you need to know a lot of things in the beginning.
Why learn the workings of the Greek option ratios when you will be trading CFDs and Forex only?
5. profitable trading cannot be bought!
Very important: No seminar, no webinar, no book can buy you a profitable trading.
In these training methods you can learn only how trading works and how you can become a successful trader. But you will not be able to reach your goal by knowledge alone.
So you have to apply the knowledge you have learned in the end. And this is more difficult than you might think: When it comes to real money, fears and other emotions quickly take over and bring the first psychological blockades in trading.
For this reason, it is absolutely significant if you know that the last and usually also the biggest step has to be taken completely by yourself. You have to deal with yourself alone and finally be able to apply what you have learned completely without allowing emotions.
Through seminars and the like you can learn how to trade, but this does not lead to success alone! To apply what you have learned should then be in the foreground!
6. you do not exist!
Fact is: For the market you do not exist. If you become a millionaire on the Bitcoin market tomorrow, not a single person will notice it except yourself. No other market participant will notice that tomorrow you have multiplied your account. It is exactly the other way round!
If you gambled away all your money on the Bitcoin market tomorrow, nobody will notice it except you. You will not get back the money you lost.
There is nowhere to complain or apologize for mistakes and try to get your money back.
Of course, I know that this is actually self-evident and that you very probably know that too. Nevertheless, this insight should lead to another, much more important insight:
Be careful in the markets.
Without risk control, without a trading strategy, without planned action etc. you will lose your money on the cryptocurrency or stock market in the long run. The market is not at all interested in how much money you make or how much money you lose. It does not care at all and it is practically merciless.
So be careful when you trade and especially when you start learning to trade!
How can I learn trading within one year?
Learning to trade is a long process for most people. It usually takes several years to learn all the important basics and strategies on your own. This long process annoys a lot of people learning to trade, because they would like to reach their goal in less time.
The only question is how to achieve this? Because there are simply a few things that you only understand if you have had something to do with the market. For example, you don’t learn from one moment to the next how to draw up statistics and check your trading strategies correctly. That takes time.
But for every problem there is a solution. The only question is whether people like the answer. You can shorten the process of learning to trade by taking some money in your hand and getting a coach. Through the experience of this person you can save a lot of time and simply listen to the coach.
In this way strategies can be passed on that would have taken years to develop on their own. Or trading errors can be revealed. The problem what many see in a coach is that he costs money. Unfortunately, this way of thinking does not help you to make progress in trading.
Hiring a coach pays for itself quickly!
If you are really looking for a shortcut and want to become profitable within a year, there is no way around a coach. The investment you make in the coach should pay off relatively quickly.
Because once you are profitable, you can earn money by trading. So your investment will pay off quickly.
So don’t be stingy and invest in your future! You have in your hand how you will feel tomorrow.