A career as a professional trader looks attractive. However, it is important to be aware of the risks it carries. A trader often operates with large amounts of money and can lose them. This is especially critical when borrowed funds are used for trading or a trader trades on behalf of an investor.
At first, when getting acquainted with the market, it is worth choosing the least risky strategies with a predictable result. “While learning technical and fundamental analysis, you will simultaneously apply your knowledge in practice. Therefore, it is worth choosing less risky instruments and types of transactions. For the first steps, promotions are great. It is worth refraining from trading on borrowed funds and from transactions for a fall, as this will entail additional costs. And at this stage, the main goal is to learn how to identify patterns that should later turn into your own trading system.”
Head of the department of the Internet broker BCS World of Investments, advises generally to start with a demo account and train on it. “If we are already talking about the beginning of trading, then it is worth starting with the least volatile market – the bond market. Then you can move on to exchange-traded funds, stocks, currencies and the derivatives market, in that order, ”he believes.
Books for traders
To start, literature is useful, which will not only tell you about the basics of trading, but also inspire. The experts shared their recommendations on which books will help novice traders.
Vitaly Averkin advises to pay attention to books that provide information not only about technical analysis, but also about the psychology of trading:
- “Small encyclopedia of the trader”, Eric Nyman;
- “Memoirs of a stock trader”, Edwin Lefebvre;
- “Zone Trading”, Mark Douglas;
Selection of literature:
to understand yourself as a future trader – Herbert Newton Kesson, “12 investment rules or 12 steps to success”;
- to understand how a quote is born – Theodore Dreiser, Financier, Titan, Stoic;
- to understand others – Mark Douglas, “Disciplined Trader”;
- to be head and shoulders above the crowd – Robert Colby, Encyclopedia of Technical Market Indicators.
Igor Pimenov recommends:
- “Black Swan. Under the sign of unpredictability, Nassim Taleb;
- “Big short game. The Secret Springs of Financial Disaster, Michael Lewis;
- The Intelligent Investor, Benjamin Graham.
How to become a trader
In principle, anyone can engage in trading. For self-trading, no special license is required. You can get the status of a qualified investor so as not to limit yourself in the choice of securities and instruments. However, if you want to trade professionally, then you need economic education and training in the field of trading.
Experienced traders recommend that you immediately decide in what capacity you see yourself in this profession, and, starting from this, choose the format of training.