12 Nov

What to Know When You First Start to Trade

online trading

Learning how to trade stocks, futures, options, or forex markets.

What to Know When You First Start to Trade

By Brandy Gallegos – Trade Navigator

You have decided to take the plunge and learn how to trade.  Maybe you are looking for extra income for your family, you are tired of brokers and financial advisers telling you what to do with your money, you’re in it to become a full-time trader or want a part-time hobby.  Regardless of your reason, you are just starting out.  Like most new adventures you are asking yourself, “where do I begin?”  This is an excellent question. All traders, even the professionals, have asked this question before.  So how do you begin? what do you do when you first start to trade?

You have probably been searching on the internet looking for answers.  When you type in how to trade or begin trading, you get the google ads and organic keywords that bring you to trading schools, professionals who claim you can become a millionaire overnight using their techniques, brokers, and trading software.  This doesn’t answer your question, it’s just frustrating.  You get that in trading you need to spend money to make money, but do you really need to spend thousands of dollars on learning how to trade? what to do when you first start to trade

I have been in your position.  When I decided to look into information on trading, I didn’t know the first thing about it. I am not considered a professional trader but I have an amazing boss, who not only started Trade Navigator, an online trading software that has been helping people trade for over 25 years, but is an avid trader himself.  These tips I am about to give you come from a man who knows the ins and outs of trading. Before you spend thousands of dollars on schools and advice, here are some general guidelines you want to abide by to ensure your success. what to do when you first start to trade

If you are going to trade, the number one rule is to minimize potential losses.  Common sense right?  Easier said than done.  Trading involves time, math, and understanding. Here are five basic guidelines to get you started. what to do when you first start to trade

  • Pick a type of security: Whether it is a future, option, stock, or forex market, learn the fundamentals of your market. Do you understand the differences between each market?
    • Futures trading is setting a price of a product to take receipt in the future.
    • Stocks trading is owning a percentage of a company.
    • Forex trading is purchasing a dollar exchange rate.
    • Options trading is a contract that gives buyers the right to buy or sell at a specific price on or before a certain date.

There are other markets and techniques that you can learn; these are just four market examples. To learn more about markets, set up a free one-on-one training session here with a Trade Navigator Professional.

  • Learn about Trading in your Markets: This rule works more for futures trading but can be used in stocks as well. Make it a habit to visit the exchange websites and learn about contract specifications.  As a trader you need to know the values within each contract so you can understand what you are actually trading. Unfortunately many traders that trade futures do not know the details of the contract they are trading.  If you do not understand the contract in its entirety, you risk losing your investment.

what to do when you first start to trade

  • Learn the types of orders available through your broker: Since market, stop, and limit orders are virtually universal, you need to know how they work so you can properly place a trade.  What exactly are orders?
    • A Market order is when you buy or sell now.
    • A stop order is buy or sell after the price moves in your intended direction a specific amount.
    • A limit order is buy or sell after the price moves against your intended direction a specific amount.
  • Practice Trading first (AKA paper trading): Practice trading before you invest any money.  How do you do this? Either start with a spread sheet or find a simulated trading platform that will allow you to practice trades.  This allows you to see if your techniques actually work or help you learn techniques before trading. Trade Navigator allows you to try their software for only $7.00 for 30 days and offers a complete simulated platform with $50,000 if free simulated trade money to practice with.  You can purchase the 30 day guest pass here.what to do when you first start to trade
  • Search for Historical patterns: Historical patterns give insight to future market movement that can assist in predicting your next purchase or move.  This technique is highly advised if you are going to dabble in stop and limit orders.  Historical data (also known as back testing) allows you to visually see the movement in markets so you and can confidently place your next order.
  • Sell low buy high OR buy hi sell low: Most traders think you have to buy first and sell later.  But many professional traders are aware that you can sell first and buy second in a market that is losing value. In futures, this technique requires a small financial investment, however in stocks it requires a much larger investment. Here is a great example for futures trading: corn is selling for $50.00 a contract in October.  You know that by January it should go down to $42.00 a contract. You sell the corn to a corn company in October for $50.00 (even though you currently do not own corn) and the contract expires in March. In January you purchase corn at $42.00 a contract.  Now you have corn to deliver in March.  Not only have you delivered the corn on time to the corn company but you also made $8.00 more on each contract by selling first then buying.  This technique allows you to make money in any direction of the market.

For beginner traders, this is a great start to understanding how to trade and trade effectively.  Of course there is much more to learn and I will continue to send out more trading techniques, styles, tips, and secrets so that you can become a great trader. what to do when you first start to trade

I ask you to please leave questions and comments so we can start a great discussion.  You may also email directly with any questions or concerns at bgallegos@tradenavigator.com.  To sign up for our newsletter, please visit www.tradenavigator.com and fill out the newsletter form.


Important notice! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone. Disclaimer: futures, options, and currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you cannot afford to lose. This email and/or website is neither a solicitation nor an offer to buy or sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any email or website. The past performance of any trading system or methodology is not necessarily indicative of future results.

Cftc rule 4.41 – hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade what to do when you first start to trade

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