Many people believe they can become a great trader overnight. They also believe that it will not take that much work. This is simply not true. There are many steps you must take in order to become a great stock market trader. Here is a step by step way to become a great trader.
1. You must first learn how the stock market works. Whatever you are using to trade the stock market, fundamentals, technical analysis or something else, you should first learn about it. Learn how you can decide if a stock is a good buy. To do this you should read websites and books that are written by people who are already making money in the stock market. See what they think is important and try using their systems yourself.
2. After you have a firm understanding of how the stock market works it is time to develop your own system. Make a set of rules for you to follow when trading. Buy when a stock does this, sell when a stock does that. These rules need to be precise so you will not have any trouble down the road.
3. After you have developed a set of rules for yourself the next step is to open a paper trading account. Practice trading with your rules in your paper trading account. Follow your rules strictly. If you make money in your paper trading account, great, it's time to move on to step 4. If you haven't been able to make money with your rules go back to step 2 and develop a new system. Keep doing this until you are making money.
4. If you have a system that is making money in your paper trading account it is time to trade real money. Be careful when trading real money. Most traders will let their emotions control them when they are trading with real money. If you want to make money you have to get in and out when your system tells you to. It might be good to start trading with just a small amount of your portfolio until you can trade your system without letting emotions get in the way.
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