MoneyMagpie

Sep 20

Starting a career in the trading industry

Trading is a form of participating within financial markets and traders look to outperform traditional methods of buy and hold investing. Traders look to profit from short term movements in price, both negative and positive; but not just from long term upward trends.

Due to the massive potential in trading it appeals to many people who consider it as either a way to make some additional income or even a full-time occupation. However, deciding to start a career as a trader should not be taken lightly and it’s vitally important that substantial research is done first.

One of the most important things to do as a trader, to improve your chances of success, is to make sure that you approach trading as your own business. Before you start trading you need to have a clear plan, in the same way that before starting a business you would need a business plan. This includes detailing short- and long-term goals, capital available, risk management and information on what markets you are planning to trade in, will you be trading in the stock market, spread betting or CFD trading? It is important to research all the different markets before making any decisions and see which one suits your goals, ambitions and bankroll.

Your plan should be so detailed that if you gave it to another trader they would easily be able to execute your strategy with it. Your plan also needs to be researched, tested with both historical data in your chosen market or markets and also against live market data and then thoroughly evaluated. It’s even worth using one of the tools out there that allow you to trade with pretend money for a period of time, whilst employing your chosen strategy over a period to see if it would have been a success or not. In fact, there are many trading platforms that offer Demo Accounts for this reason; and in most cases compliment this with information on learning the ins & outs of CFD Trading, crypto and forex trading as well as spread betting.

Whatever your plan is when you start trading, make sure you stick to and don’t deviate from it whilst trading and employ a stop loss, which is a predetermined amount of money that you are willing to lose in any given trade and don’t exceed it. Even if ignoring a stop loss results in a profit, it is still bad practice to do so.

Before even considering starting a career in trading you must be prepared to put a lot of time and effort in it. Just reading a book on forex trading, for example, will be nowhere near sufficient to equip you with what is needed to step into the world of trading and practice with a demo account before you ever place a trade in a live market with real money.

Trading is definitely a potential way to make a lot of money, but it’s not something that should be taken lightly. In the same way a lot of money can be earned, it can be lost a lot easier. Never trade with money you cannot afford to use and consider looking at some social trading apps, where you can see what the expert traders are using and also have access to market data that will assist you with personal trading decisions.

 

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