Well this is the perfect time to learn to trade. Here are the some few steps to get started with Day Trading for beginners.
So I think with all the social distancing and cities in lockdown around the world, many people are stuck at home. And eventually you run out of things to do and lambos to watch. peoples are asking me how a person brand new to the market should start learning day trading.
So this article is made for beginner traders looking to get started. And my recommendations of how I would personally start again if i can go back in time six years ago. Again, these are my personal opinions only not financial advice.
So the first thing to do is to get a paper trading account. Paper trading means you are trading fake simulated money in your brokerage account. Like these fake money right here. I don't really know what these pink words are printed on there. Probably means something like “completely legitimate American dollar bills”.
And the reason I recommend paper trading first, is obviously if you are brand new to the market, You don’t know what candle sticks are, technical analysis, reading SEC filings, identifying float, analyzing news etc. and why would you risk your real hard earned money and dive right into trading with the money, when you have no idea what you’re doing. Take a step back and start practicing by paper trading. Some of my recommended brokerage accounts for paper trading are, first of all, XM Broker, completely free to sign up for American’s, and for Canadians you need a $5k USD maintenance in the account in order to paper trade with live market data.
XM Broker also includes an on demand feature. That allows you to go back in time and backtest historical price action on almost any stock. So that’s an extremely valuable feature for day trading beginners. Another good one for paper trading is interactive brokers available for both US and Canadians.
Register Free XM Paper Trading Account: https://bit.ly/3cYzJNI
With IB you need to purchase their data subscriptions in order to receive live market data. I believe the packages are about 20 a month US, which is not bad at all. A third broker for paper trading to get started with is Webull, a free commission broker platform. While i do not recommend $0 dollar commission brokers like webull, robin hood and a few other apps for live day trading. I think for paper trading it’s totally fine. Especially if ,you’re brand new and just getting warmed up with learning the ins and outs of day trading.
So what i like about webull, is that it has a very intuitive mobile app interface, and a desktop PC and MAC version. So you can paper trade to LIVE market data for free on all those devices. It’s very versatile. You can trade extended hours premarket or afterhours on Webull, trade options, and even short stocks. If you sign up for webull using the link in the description. You will receive 2 free stocks. One worth up to $250 upon open, and a second one worth $12-$1400 after you deposit.
Webull paper trading with free live market data is available for both Canadians and US. But only US citizens can open a live funded account. Now that you have your paper trading account set up, it’s time to start learning. This is the part where a lot of people will tell you to buy some $5K dvd’s and $200 a month alerts plan. We’ll talk more about that later. But here’s an unpopular opinion, and again just my personal opinion only not advice.
I literally have been making short and simplified articles for over a year now talking about day trading, trading strategies, and key things to look for, how penny stock pumps work. And the whole point of taking your time paper trading, and using free resources first is to prepare yourself mentally and financially for the years of journey that is to come soon.
If you really decide to take on this path and start trading seriously. Remember, if you’re brand new to the market, you have no idea all the work, time and effort that’s required of you in order to make it in day trading. Most people out there buy into the kool aid that trading is easy, you just spend $200 on alerts for one month and you’ll make thousands of dollars of easy, working 1 hour a day and from anywhere in the world.
Let me reassure you, after trading for 6 years now, the reality is far from that. Day Trading is NOT easy, controlling risk, maintaining discipline and focus is a constant battle on a daily basis. Like i mentioned in this article, even if you are trading part time while working a full time job, you are essentially running a part time business that requires full time effort.
Paper trading with simulated money and you haven’t spent thousands into trading DVDs and programs when you had no idea what kind of path you’re taking. So essentially, it’s a risk free experience. Again, nothing wrong with these paid courses and educational DVD’s that actually provides value, and not just selling the dream. But I’d just recommend complete beginners to dabble with free resources first before making such costly investments.
After you’ve started paper trading and learning some set ups and strategies with free resources, the next step is to smash that like button to make it rain Lamborghini’s. Actually, I heard toilet paper is now worth more than lambos now. So give me one second So if you have a Lamborghini you want to trade in for this perfectly unopened bag of toilet papers.
It’s time to journal your trades. That means spending 5 to 10 min each day writing down your entries, exits, and the set ups from your day trades. Its only by tracking your trades, that you can start seeing what you are good at as a trader.
1. Do you have higher probability of success rate by going long or short?
2. Are you better trading large caps or small cap penny stocks?
3. How well are you managing risk for each set up?
4. Do you trade using technical indicators?
These are all the important questions you’d need to find out for yourself from you . Remember, you can see what other people are doing on social media, using vwap ichimoku clouds, or shorting parabolic blah blah blah etc. But what works for others, are most likely not going to work for you.
And that’s what journaling your trades will do for you, once you figure out a few consistent Qualities that you are good at, maybe it’s dip buying the morning panic, or swinging overnight. Once you have one or two, then just focus on those setups, and block out everything else.
Now after you’ve spent a few weeks or couple of months doing step 1 to 3, you’ve been paper trading, learning from free resources, and tracking your trades. By this point, you should know whether this day trading business is something you really want to take it even further and start expanding, or for most people 90%, this is the point where they realize, this is not for them, it’s too much time and effort, and they give up. And that’s totally fine, like we talked about earlier, its risk free.
But for the rest of the 10% of beginner traders who want to start taking trading more seriously, Now the time to start looking for a premium community of likeminded traders to learn and trade with. No I’m not talking about joining places where they alert you to buy and sell. That defeats the whole purpose of learning to trade for you.
In a community with other likeminded traders is where you start learning about trading beyond just the patterns that so many try to memorize. Personally, it’s only once I’ve invested my “market tuition” and found a good group of solid traders that I started to learn about all the important nuances in trading.
That otherwise would have taken me years to learn going about the DIY style with just free resources online. And I have absolutely no regret for all the tuition I’ve spent in the beginning stages, because that sped up my learning curve. It’s through premium education services that I learned about the nuances in news headline analysis, how the macroeconomics start to impact stock movements in the short term. And all the other nitty gritty detail such as price action, money flow rotation between strength in large caps and how that affects the small caps.
Yes, I understand why online trading education gets a bad rep. It’s always the endless Lamborghini ads and selling the dreams that people think about, because those are the people with millions of marketing budgets for those ads. I’ve gotten tons of emails and messages from traders who have bought into the dream for those Lamborghini marketing. And that’s extremely unfortunate. I totally fell for that years ago too. But now, I've learned from that experience and know what NOT to do. All i can say is, if it sounds too good to be true, it probably is. Do not fall for these Lifestyle marketing and any promotions that tell you making it in trading is fast and easy. The reality is, trading is not easy, but if you are willing to spend the time to learn, put into the hard work and effort, it can be done, slowly but surely.
GENERAL RISK WARNING
NOTE: This article is not an investment advice for anyone because online trading could be high risk for all who have lack of knowledge & experience. 86% traders lose money in financial markets. we are not your financial advisors who guarantee of your profit at all.