In his book ‘Outliers,’ the writer Malcolm Gladwell claimed that if you practice something for 10,000 hours, you could achieve complete mastery of the thing in question.
Whether that’s true or not remains open to debate, but the good news is that you won’t have to invest 10,000 hours into your trading to improve.
In fact, with some practice – which doesn’t have to cost you a single cent – and a commitment to research and learning, you can become a profitable trader and in quick time too.
It won’t be easy, and you will make some mistakes along the way, but there are two ways to improve your trading – learn by doing and learn by learning.
Practice what you preach
To make the most of your investment, you should dedicate your time to learning how to improve as a trader and then implementing those learnings in the ‘real’ trading environment.
The first thing you will need is a reputable broker, and that is the key takeaway – this broker must offer a demo account to its clients.
That way, you can put your learning into practice, scanning the markets and trying to identify opportunities for trade but without risking your own hard-earned money in the process.
Most demo accounts let you use all of the standard trading strategies that you might want to deploy, and the automation tools like take profit and stop/loss that you will utilize to protect your bottom line.
And then, when you are happy, confident, and ready to begin your trading journey, that’s when you can implement your strategies in the real-world environment for small stakes at first, of course.
The best brokers offer demo accounts to their clients, so take the time to research which firm is right for you – this eToro silver tier review is an excellent starting point.
Doing your homework
Of course, if you don’t know what you are looking for when you scour the markets, how can you expect to be a successful trader?
Using demo trading accounts is a useful way to put into action the skills and knowledge you have gained by doing your homework.
That means taking a deep dive into the stacks and stacks of (free) content that is available online. You don’t need us to tell you where to find that – Google, YouTube, social media, and many other online resources are significant waypoints to get you started.
There are many great books to read, and remember that the lessons these teach are timeless – even if a tome was written decades ago, many of the basic principles remain, even if the assets being traded have changed dramatically since the advent of the internet.
Don’t be afraid to learn from the best either. Names like Warren Buffett and George Soros are inextricably linked to trading success, and there’s no harm in examining precisely what it is that makes them tick – and, more to the point, what they’re buying and selling.
You can set up search engine alerts that reveal when a new story about Buffett, Soros, or any other trader you admire becomes available, and these can be an excellent resource.
Of course, if you want to strike out on your own, you must dedicate yourself to reading the markets effectively. Technical and fundamental analysis is imperative to pretty much every trading strategy under the sun, so reading the charts – and predicting price movements accordingly – is essential. Do NOT part with a single cent until you are comfortable predicting market trends from the pattens in front of you.
A little bit of both
Want to know the secret to trading success? Leave no stone unturned in your pursuit of knowledge and understanding.
Okay, so that wasn’t the silver bullet you were hoping for, but the point remains: a little knowledge is dangerous. Lots of knowledge, well, that’s much better.
Would you rather learn the easy way, by using your free time to read up on a topic you are interested in, or learn the hard way – by losing lots of money by trading the markets while utterly unprepared for their unique machinations and often erratic volatility.
Success doesn’t come along by chance; it is typically earned. And while you won’t need to put those 10,000 hours in, as Gladwell suggests, you will need to be prepared to put in the hard yards to become consistently and repetitively profitable in your trading.