As with any complex or technical subject a step by step approach towards learning to
successfully invest in or trade stocks is necessary. For instance before someone new to the subject can successfully understand complex option trading strategies, he must first become familiar with basic terminology and actions he would take to buy or sell stocks.
In other words a new trader needs to crawl before he walks.
Thus education in stock trading must start with the most basic concepts and actions involved in trading and ensure they are fully understood and practice the actions connected to these basics before trying to master further more complex approaches.
The steps to master are:
Understanding all the basic words and actions necessary to set up an account and to purchase a security.
Understanding Money management.
Formulating a strategy for buying and selling.
Understanding how news events affect stocks and markets.
Understanding and Use of Technical indicators.
Understanding and Use of Fundamentals and their relationship to stock price movements.
Setting up information, charting and other needed services as to be able to quickly obtain Technical and Fundamental Information.
Determining the needed technical requirements of any on line computer including Internet service provider, bandwidth, Memory needed and computer speed needed and taking the actions to set these up and maintain them in good order.
Finding a suitable broker and establishing an account.Becoming fully familiar with and proficient in operating that brokers trading platform.
Fully testing any trading strategy formulated in real time.
Ensuring that the Trading area is free from distractions so that a trader can concentrate on his actions.
Handling any major distractions in the traders’ life so that he can concentrate on trading while he is doing it.
Buying and selling on line in accordance to the tested trading strategies.
A full review of results and correction of any flawed strategy.
Study of other strategies that can then be implemented into the trading plan.
Understanding basic option terms and strategies and Execution of these.
A review of and handling any tendency to lack discipline in trading and trade outside of tested strategies or the traders’ plan.
A correction of any tendency to accept and use misinformation for trading purposes, being able to evaluate what is important in their trading success.
Understanding how markets such as Stocks, Stock Options, Financial futures, Bonds and Commodities affect each other and how these affect the traders’ strategy and plan.
A complete mastery of the market might result in ever increasing ability and knowledge on each step listed. More and more depth of understanding can be achieved resulting in bettered results by improving weak points a trader has on the above.
