Investing For Beginners: What You Need To Know

Investing For Beginners: What You Need To Know

Investing For Beginners: What You Need To Know 1024 576 Steven Dux

It’s a fact that given a chance, we would all be open to progressive change in our lives. 

Change, that can make us more efficient, joyful, and content. Yet, a lot of us don’t try to because we think change will involve a massive overhaul in a short period of time. But that is far from the truth because more often than not, it’s the step-by-step change that counts.

Especially now, when our world is going through a colossal remodel. We need to adjust the way we live and work, gradually, keeping up with this remodel.

“All great changes are preceded by chaos.” – Deepak Chopra

The global workforce is under tremendous pressure, many doing multiple jobs to make ends meet while others are struggling to find work. The common factor being, neither of them has any financial freedom or security.

One thing has become abundantly clear recently: Most people are still living paycheck to paycheck.

Moreover, most people are doing jobs they do not enjoy. A worldwide poll conducted by Gallup revealed 85% of people are unhappy in their jobs. This percentage of people unhappy with their work is staggering!

We spend so many hours of our days at work. Work is a huge aspect of life that gives us a purpose, but sadly for many people it’s become a source of dissatisfaction.

With the current state and remodel of the world’s economy, many people are searching for novel ways to make a living (and achieve financial freedom). This economic consequence has led to a mammoth shift to remote work and escalating unemployment.

If you seek financial freedom it’s not about working longer hours or making an overnight career move. It’s about the change from working for money to having your money work for you.

You can spend decades of your life going from paycheck to paycheck, doing work you don’t enjoy, and going through the daily grind. Feeling uninspired and undervalued. Some people are okay with that. But the fact that you’re here, means you are not one of them.

Going through the daily grind has left you feeling unfulfilled. You aspire to be more.

That was me a few years ago…

I found myself in a position where I would have to find my own way to make money, pay for rent, and basically survive each month.

However I could not stop worrying about how expensive everything was.

It wasn’t like this for previous generations!

I am sure you can relate. Most people aren’t satisfied with what they’re making even when they are working so hard and doing all they can. At the end of each month maybe you’re struggling to pay the bills! 

Even if you aren’t struggling, you’re unable to save for a safe future.

This is how I felt. What I was making just wasn’t enough. I got disheartened. When I look back at that time now, I realize it was all an opportunity.

“Yesterday I was clever, so I wanted to change the world. Today I am wise, so I am changing myself.” – Rumi

Back then, my whole life underwent an overhaul. It has been one of the most enriching experiences ever since. I would like to help you do the same. 

This is the first article in a new series on Investing for Beginners wherein I will discuss and share my tips on getting into day trading, and why I think day trading is the best way to invest money.


Investing For Beginners: The Series


If you’ve contemplated getting into day trading, it’s imperative you take the time to follow this series and understand the concepts. By the end of the series you’ll be better prepared for success.

In this first article you will figure out what day trading is, why you should consider getting into it, and how to get started. As and when I post new information, I will link to them from this article so make sure you bookmark it and keep it handy.

Now let’s get started…

 

What is day trading?

Day trading is defined as the buying and selling of a stock within the same trading day. It can also involve buying and selling multiple times within the same day. The goal is to make little profits every day that add up over time.

How is it different from conventional trading? It is short term, lower in volume, and based on expected patterns and formulae.

Benefitting from small price moves can be a money-spinning game—if it is played right. But it can be a perilous game for beginners who don’t stick to a determined strategy. When the buying and selling needs to happen is based on strategy designed using predictable patterns.

Day trading does not guarantee immediate success. It is not a scam like many people falsely believe! Day trading takes a staggering amount of patience and a profound understanding of the market.

The road during your first year is bumpy; there are lots of ups and downs. As a beginner in day trading, your goals should be pragmatic.

Consider the following before investing time or money in day trading.

  • Do you have adequate investment to actually invest? If not, wait until you do. Meanwhile, continue your knowledge building process.
  • Consistent profit will take six months to a year to arrive. Are you willing to be patient?
  • Can you commit to trading two to three hours a day, considering your current schedule and bandwidth?
  • You shouldn’t quit your job until your trading profits can sustain you. Your plan needs to fit your life.

The predicament that’s often stopped people from entering day trading is that 94% of first time traders fail within the first year. But most people fail because they get into it with the wrong assumptions… that day trading is a quick-rich scheme. 

It isn’t quick or easy at all! It needs an investment of time, capital, and effort. 

 

Why Day Trading is the Best Way To Invest Money

The biggest reason I’d say you should get into day trading right away is not just to have control over your money, but mainly to have control over your time.

Research shows it’s having control over your time that brings the most amount of contentment into your life.

And of course there is financial freedom to be achieved via day trading. Currently you are incessantly working for money. But you should have your money work for you.

This is particularly true today in times of economic instability because day trading has been one of the few sectors that have not seen too many economic difficulties.

“Remember that Money is of a prolific generating Nature. Money can beget Money, and its Offspring can beget more, and so on.” – Benjamin Franklin

Moreover, getting into day trading brought back motivation into my life. It gave me purpose and hope. At one point I was prepared to return back to China and then I found my calling.

Today, more than ever, you are looking for a purpose and to reignite the zeal for life. Day trading, if done with the right advice and knowledge, can help you earn not just money but independence.

Day Trading has allowed me to gain control of my time and financial situation.

If you’re committed to changing your life, day trading can do that for you.

Today, my purpose is to help others take charge of their life and that is why I help beginners get into day trading.

 

Investing For Beginners: How to get started

As a beginner, it’s important to do as much homework as possible and follow high-quality counsel.

This is what I suggest to help get started with day trading:

1: Get Your Capital Ready: 

Capital in a day trader’s life can be compared to inventory in a store. It’s an essential ingredient, and how much you have—and how you handle it—will establish your income.

Inevitably, you will lose some of it. Like any form of investing, Day Trading comes with its risk. It’s important you only play with what you’re able to (and willing) to lose.

I counsel my students to start with at least $3,000 of capital at the beginning. You can start with less, but $3,000 gives you the leverage you need to build momentum. With this, you set yourself up for potential success from the very beginning. 

If, at this point in time, you don’t have $3,000 that you need to go all-in, begin saving. 

While you are, study the markets, broaden your knowledge, and create a plan.

 

2: Build Your Knowledge

You have taken the first step in your knowledge building process by getting curious about investing for beginners.

Knowledge plays a huge role in success in day trading. Invest in yourself from the beginning. With this approach, no matter what happens you’ll always have the necessary skills.

You need to build this gradually, so make sure you read my other articles, subscribe to my YouTube Channel, and sign up to my Free Day Trading 101 Newsletter where I guide you through investing for beginners.

You may also want to watch this interesting discussion I had with Ryan Higa for his Off The Pill podcast. Ryan has 20 million subscribers and asked me pertinent questions that have majorly helped a lot of beginners enter day trading.

3: Create a Plan:

We are talking about making a change in life. This will be the beginning of a new career for you. But a fresh start in day trading cannot happen without a proper plan.

As you start this new venture, you cannot do so haphazardly. 

You need a plan with strategy and goals.

Currently, invest some time building this plan.

It’s critical that it includes risk management and an exit strategy. 

Risk Management: Whenever I’m working with beginners and initiating them into day trading, I often notice that they hesitate to think about risk management. 

In order to become a profitable day trader, appropriate risk management is vital. Risk management is a key factor that can actually set you up for success.

Thorough risk management ensures your losses do not burgeon and don’t turn into big ones. Remember to ascertain how much risk you’re at ease with. That will involve calculating a profit/loss ratio, which is what you anticipate the profit will be versus what you might lose on a particular trade.

Ask yourself: What is the maximum percentage of overall capital you’re willing to risk? 

Keeping a limit of a 1% to 3% potential loss, the general risk remains low as a whole and gives you room to trade more in a day. I call this The 1% rule! 

It signifies that the maximum risk you take is no more than 1 percent on a single trade. 

You will be making several trades in a day, so fixing the upper limit of the risk at 1% will ensure there’s more than enough control to provide sufficient returns while keeping any losses super low. It’s virtually unattainable to be cost-effective with every trade; that’s why one must be far-sighted enough to keep the losses low. If you do not hesitate with the short-term volatility you’ll be rewarded in the long run.

 

Goal Setting: Set goals for how much you want to earn (and by when). 

Just like in any business, a goal in mind will help you work towards it.  

Ascertain that your goals are realistic. If you’re keeping your risk at 1%, your goal for profit should be around 2% or more.  Settle on percentages that work for you to keep you in this day trading game for the long haul.

 

Paper trades: Ah! The secret weapon! Paper trades are the most significant thing that will help you prepare for day trading.

 I often get asked, is there a way to practice day trading without the risk of losing money? 

There is. It’s called Paper Trading.

Paper trading allows you to buy and sell securities, just like you would in day trading, without risking your money. While you’re building your proficiency and honing your skills, paper trading allows you to simulate actual trading. It brings you the freedom to make mistakes and become skilled at new patterns.

It will help you perceive what the real deal will be like!

Paper trades help you determine your strengths and weaknesses, experiment with innovative techniques and patterns, and control your risk.

For example, as you begin to practice, you may become aware that you perform better at certain times of the day. Direct your attention to these times. Note such patterns. 

I still use paper trades when testing new techniques.

I advise all beginners I mentor to do the same, particularly in the beginning. My students are advised to prepare for 12-months of analyzing the markets and experimenting with paper trades before they invest large amounts of money.

It’s the secret weapon nearly every successful day trader uses.  Once you start paper trading, you too can build a very successful portfolio.

 

­4: Prepare to Invest Time: 

At the beginning of your day trading career, it will take up a significant part of your day. 

The investment of time is crucial. 

When I started off, I used to spend 4-6 hours studying the markets and making paper trades. When you first enter this field you spend less time trading and more time studying, practicing, and observing.

This is how you put together a foundation so in the future you only have to work 2-3 hours each day. Most new traders leap straight into trading too much and studying too little.

That is why most of them struggle. Now you know, you will not make this mistake.

 

5: Prepare to commit: 

As I said, this is not a get rich quick scheme. 

This takes patience. And commitment. 

You cannot get into day trading and expect your life to instantly transform. This is another reason most new traders fall short. Many are of the belief that taking a few courses and reading a couple of books is going to bring them success. It will not. True commitment will.

Day trading has the potential to become your major source of income in the future so commit to it that way.

Yes, things may feel excruciatingly slow at first. You may get discouraged, especially considering our times. 

But do not stop. Keep going. The hard work and investment will add up. 

 

6: Learn about the Right Technology and Tools:

Before you start trading, it’s vital to know the right tools for it. Many beginners make the mistake of not reading and researching the necessary tools. You need to make certain you’re armed with the finest software for trading, scanning, and charting. 

A beginner like you can come prepared with sufficient knowledge and yet, not make use of it enough without the right tools. 

To begin with, you will need scanning software. Remember, just a few stocks are worth trading in. Good scanning software will help you pick them correctly. That is what makes a day trader make any amount of money and sustain in the long run.

Then, charts are prepared to observe asset prices move and come to a decision on when to make the trades. Good charting software enables you to create and view these charts effectively. It’s a good way to comprehend market movements.

As a day trading beginner, you should take advantage of the several free trading tools available out there, and to also invest in a reliable trading platform like Stock Craft.

 

7: Get a Mentor: 

A mentor guides you through your day trading journey, and now, as I look back, I wish I had gotten one sooner.

It’s good to have someone guide you, no matter which new career you’re entering.

When it comes to day trading, a good mentor helps you gather knowledge faster than you would on your own so you can jump sooner into creating your own techniques and patterns. 

This is what you need to make day trading your primary source of income.

This is how you change your life quicker.

Get a mentor. Find someone you trust and follow their advice.

Working under someone who has already climbed the ropes of day trading before makes your path easier and helps you reach your goals faster.

 

Investing For Beginners: What Next?

You’re ready to change your life, and the good news is…  this is just the beginning. 

With this article, you have kicked off your journey into day trading. We will dive into more investing for beginners soon in my upcoming posts.


Investing For Beginners: The Series


I’m committed to helping beginners make day trading their primary source of income. I will need the same commitment from you if you wish to build a successful trading portfolio.

Anticipate spending at least six months to a year before you start to see consistent returns. Take your time reading through the material in this series and the website (do as much research as you can).                

Many of my students had similar issues as you and they went on to make waves in this industry, transforming their careers.

It’s time for you to build your own knowledge and expertise, and to change your life for the better. 

What are you waiting for? Strike while the iron is hot.

Right now, I invite you to take a few steps with me 

  1. Subscribe To My Youtube Channel: this is where I share practical training on how to trade, as well as behind-the-scenes insights into the trades I make.
  2. Join My Newsletter: I write these emails for people who want to learn the basics of Day Trading and the practical steps they should take to get started.
  3. Join The Freedom Challenge: this is my flagship program for traders who want to level-up and learn about the techniques I use, how to use them, and what to do to turn Day Trading into their primary income stream. 

 “The only way to make sense out of change is to plunge into it, move with it, and join the dance.” – Alan Watts

 

1 comment
  • Noel July 7, 2020 at 4:16 pm

    This is the blueprint, after paper trading for some time I definitely need a lot of help , identifying patterns, charts, coming up with some strategies and worksheets of some form for analyzing the markets. This is the most difficult but on the plus side I started tracking all my trades and creating a plan prior to going in the market which sometimes I still fall for fomo.

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