How To Start Stock Market Trading

One of the questions that I receive a
lot is Marcus. How do you get started with trading? And you see it doesn’t matter whether
you’re absolutely new to trading or you have been trading for a while. The good news is when it comes to
trading they’re actually only three things that you need to know. And I think that’s pretty cool
because if you think about investing in real estate, where you need to know 68 different things or running a business, where you need to know three hundred and forty two different things when it comes to trading it all boils down to three things. So the first thing that you need to
know is what do you trade so you can trade stocks, you can trade options, you can trade
futures, you can trade forex, you can trade crypto currencies. What should you get started with? And here’s my take on it. I think that you should get started with stocks and options. Now of course you can trade futures
you can trade forex you can trade crypto currencies however these instruments futures forex cryptos they are more volatile and I don’t think they’re perfect for
a beginner. If you’re a beginner stick to stocks and options. This again step number one. Want to trade is how to find the best stock to trade. There’s 15000 stocks and you know what I like to look for. I want to see stocks
that are moving and by moving I mean that have small but consistent trends. So stocks that are not erratic, stocks that are nicely moving going up and down and that’s where I use my tool the power X analyzer to find these stocks to run the scanner and find it of all these 15000 stocks that we have currently traded
at theU.S. exchanges. Step number two, is “When to Enter”. So let’s just say when to BUY a stock. Right. Because you need to have
specific criteria of when to buy. That’s step number two. Now what I’d like to do I like to
trade what I see not what I think and therefore I like to use
indicators. Technical indicators are easy to use, technical indicators are objective. So this way I don’t have to worry about how to interpret news and that I think they’re perfect for beginners because they’re black and white. Right? I mean either an indicator is above a certain level or below. Now, the three indicators that I like to
use are stochastic, RSI and MACD and the levels that I like to look for
especially for stochastic and RSI is the 50 level. Once we cross above the 50 level it is more likely for stock to go up. And once we cross below, it is more likely for a stock to go
down. Now I like to use three indicators, so that all three indicators are confirming each other. Step number three, is “When to Exit a Trade”. OK. Now that you enter the trade you have to exit. And does not matter whether you’re
trading stocks or options forex futures crypto is. At some point you have to exit and there’s two types of exits. One is to limit your loss. So you’ve got to have a stop loss. If the trade does not go in your favor you need to know when to exit and say OK this did not work. Trust me, there will be trades that are going against you. So… You need to know when to exit. The other type of exit it’s a profit
target. So when a trade is going in the right direction. So when a stock is going up the question is “When do you exit?”. Now what I’d like to do. I’d like to determine both my profit target and my stop loss before I even enter a trade because this way I don’t get emotional while being in a trade and by emotional I don’t mean that I’m crying. No! I’ve been emotional, this means that we we have two emotions that are driving our actions as traders. Right. It’s greed and fear. And when you have a trade that is
working out you might tend to get greedy. I mean I used to in the very
beginning of my trading career and hope that wow this is… This is the trade that will make me thousands or 10 thousands of dollars. And what I experience often is that
the trade actually then turned around and went against me. So take profits while they are there. Nobody ever got broke taking profits. Now it’s saying with a stop loss. Right. I mean never hope that a trade might turn around if it didn’t work out, if it didn’t go into your favor, if the trade went against you, GET OUT and instead of hoping that it
turns around just pre-defined your stop loss
level. Right? Choose a level that you’re
comfortable with. Now I personally like to use the
concept of the ADR, the Average Daily Range, to calculate my profit targeted my stop loss. Because when using the
Average Daily Range it means that if a stock gets more, more volatile I can use a larger stop loss and a larger profit target. And when a stock is less volatile or maybe the markets are becoming
less volatile, than I’m using a smaller stop loss and a smaller profit target. So anyhow. How do you get started? Well, it all breaks down into three things. Number one, what do you trade whether it’s stocks options futures or forex. I recommend start with stocks and then you have to find
a way to pick a stock out of the 15000 stocks that are available. And you know that I like to use the
indicators here. Then step number two, is know when exactly to enter. So have very specific
criteria that tell you when you buy a stock or option or futures… Doesn’t really matter. And step number three, know when to exit when exiting, I like to use a profit target if the trade is going in my direction and I like to apply a stop loss if it doesn’t work out so that
immediately I get out and move on to the next
trade. Now my profit target, I typically choose twice as big as my stop loss so that I make more money on my winning trades than I lose on my losing trades. I hope this helps! And if you are a
little bit overwhelmed with all the the stuff around trading just think of these three categories. Right? Want to trade, when to enter, when to exit Hope that helps. And I’ll talk to you soon.

1 thought on “How To Start Stock Market Trading

  1. Another great gem 'to determine both my profit target and my stop-loss before i even enter a trade'
    the question is: can all this be done automatically with the press of a single button? which charting or trading platform and broker…

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