Table of Contents:

1. Make a commitment to become a winning stock investor
2. Create a daily learning program 
3. Decide what type of trading is right for you?
4. Pick a strategy
5. Get a good trading simulator
6. Practice until you are good enough to use real money
7. Start trading live

This article discusses the very basics a beginner stock market investor needs to start your journey. It gives you a step by step road map to go from being a complete novice to becoming a capable trader. It is action based and if you take each step, you will find yourself profitable in the market in no time. We hope that you will use this article as a guide to help you move forward. 

Introduction

So, you have decided that you want (or need) to be in the stock market. Why not? By far, the vast majority of wealthy people use the stock market as one of their financial tools to grow and protect the money they earn through their own efforts. The truth is that there has never been a better time to start using the market. As a matter of fact, with the current economic situation our country faces, being in the stock market is now becoming an absolute necessity if you want to stay one step ahead of inflation and rising interest rates. Trading the market is one of the only ways you can stay ahead of the curve and not have inflation erode the value of your money.   

1. Make a commitment to become a winning stock investor

The first step of your journey comes from within you. You must make a decision and commitment to stick to your game plan for the long haul. Investing, or put more aptly “Trading” is not a get rich quick scheme. Trading is a skill just like learning to play a musical instrument or how to play golf. When you start to learn a brand-new skill, everyone starts at the same level. Through learning and practice everyone and anyone can get better at it. Take golf for example. When first starting, everyone is horrible. By taking lessons and going to the driving range you get better and better at it. Not everyone is going to be Tiger Woods, but everyone can develop a sufficient skill level to get out on a real course and not embarrass themselves. 

If you came to this article hoping to find the next magic stock picking system that will make you rich overnight, forget it! Unfortunately, there are many so called stock “gurus” on the internet that want to sell you the next set of magic beans that will take you to the promised land instantaneously. That is not how it works. So, you have to make a decision to take this seriously, start learning and practicing and if you work hard you will soon be moving toward your goal.  

• Create a daily learning program

One of the key fundamental things you must do right from the beginning is to create a daily learning program for yourself. You cannot start investing in the market before gaining some basic knowledge about the market, stocks and how it all works. Successful trading requires you to learn more than a few trading strategies. In particular you will have to start learning the following:

• Trading basics (the level of learning required depends on your current knowledge level)
• Learn about the US financial markets and how it effects your trading
• Learn about the financial world and how macroeconomics, politics and news effects your trading 
• Learn about individual stocks and what makes them good investments for your type of trading 

To start with we suggest you identify a few financial news sources that you will rely on every day. I personally like to use Investor’s Business Daily and the Wall St Journal. These two seem to have the least amount of rhetoric built into their financial reporting. You should also be very selective in the articles you decide to read. Try to stick to fact-based articles. Articles about how high a stock can go, or the next magic market sector are great for selling subscriptions, but they won’t help your trading. Investor’s Business Daily does a lot of trading education so at the very least I would refer to it on a daily basis. 

The next step is to create a “Google Alert” for topics you decide are relevant to your learning. If you are not aware of google alerts, follow this Google Alerts and it will walk through how to set one up. Google Alerts scours the internet for all types of new content regarding the subject of your “alert” and then sends you emails with a summary of the results for your easy reference.

The last step is to find your favorite source and follow the US Economic Calendar. This lists the economic numbers and reports that are going to be released by the government on a weekly and daily basis. Learning what these numbers are and how they affect the stock market is very important to trading successfully. Following and understanding these numbers will be a key to your success. I like to use Market Watch when I follow these numbers. 

• Decide what type of Trading is right for you

When first starting out, many people don’t have any idea of what investing, or trading is all about. They have a vague understanding of what it is and no understanding of how to do it. The first thing you have to do is to understand the three different forms of stock investing and decide which is right for you. The three major types and their pros and cons are listed in the chart below: 

Type of Trading	Description	Pros	Cons
Day Trading	The process of buying a stock and closing out the position by the end of the trading day	Profits can come quicker No overnight risk	Very difficultExtremely Fast PacedMistakes are deadlyGlued to screen80% to 90% lose money
Swing Trading	Buying and selling stocks for intermediate term. Holding time lasts anywhere from 2 weeks to several months	Less volatile than day    tradingSome mistakes can be overcomeCan trade without being there	Overnight RiskMoney locked up Longer
Long Term Trading	The process of purchasing stocks with the intent of holding them many years or decades	Very ForgivingTax advantagesLet’s the market work for you	Long term lock-up of moneyProfit goals not set

For the average person who wants to get into the stock market, Swing Trading is the most feasible option. It allows for time flexibility and better planning and execution. Day trading is by far the most difficult of the three options. Day trading is difficult and not recommended for anyone!

• Pick a strategy

Once you decide what type of trading you are going to do, the next step is to find effective strategies used by swing traders. I have to warn you right now that the mere selection of a trading strategy is probably going to be the hardest thing you have to do in the beginning. If you search YouTube or the internet in general for your trading strategy, you are going to be bombarded by ads from people promising you some type of stock market magic. Stay away at all costs! Find a trading strategy that not only works, but that fits you. Our future blog posts will dive into this subject in detail. 

• Get a good trading simulator

Of all of the tools that have become available to investors on the internet, trading simulators are the most useful. In the old days, we tried to do this by hand. The process was arduous, inaccurate and of little use. Now you can trade the stock market in real time and with real execution but without having any money invested. Trading simulation or “Paper Trading” as it is often called can make you a good trader in record time. Trading is a skill and you can now practice it on the real playing field. I like to use the free trading simulator on a site called TradingView.com. Go there and set up your free account.  

• Practice until you get good enough to use real money

The amazing thing is that you can actually take the strategy that you have decided to use and start testing it and practicing it in the market via your trading simulator. Not only does this allow you to practice in real time with no money, but it also will allow you to make sure you have picked the right strategy. If you are using a strategy for a few months and it isn’t working, you might have picked the wrong one. Be sure you give it sufficient time to actually test it. Don’t let it go too long without showing some positive results. 

• Start Trading Live

Once you have been practicing for some time on the simulator and starting to show you can consistently make money, the next step is to get into the market live. There is no need to fret about this. Recent changes in the stock market have made it so that you can start extremely small and build. In the beginning, if you are feeling too stressed about initiating the trade, most likely you are trading too big. Scale it down and make it so that you can keep fear out of your trading.  

Key Takeaways:

• Trading is a skill, anyone can start and get better at it
• Make learning an easy everyday habit
• Swing trading is the best fit for most busy people
• Trading simulators are the most effective tool to help you learn to trade
• Don’t put real money at risk until you start to get good at this

Conclusion

So, there you have it! A basic road map to start trading stocks and making money in the stock market. If you take these steps and start practicing, you will get better and start making money consistently. The key point to remember is the concept that trading is a skill. Like every skill you first have to learn then practice and then start doing it for real. If you just started playing golf and took a few lessons, you wouldn’t run right out to the golf course. You would go to a driving range and practice until you were confident enough that you wouldn’t embarrass yourself. It is the same with trading and with trading simulators that you access from your computer or phone, you can get very good in a relatively short period of time.