The financial market is a fascinating domain that has given rise to a variety of job opportunities. However, the longevity and profitability of one’s trading career are dependent on their ability to understand market trends and exercise sound judgment. This guide details the best techniques for starting a profitable trading career from the bottom up, even on a limited budget!
There are ways in which you can take to increase your chances of success whether you’re trading FX, stocks, commodities, or crypto. Let’s start from the basics.
Can a person be a full-time trader?
Yes, it is possible for a person to have a full-time trading career. However, succeeding in it necessitates a great deal of dedication, hard work, and discipline, as well as keeping up with market developments and managing risk effectively. Having a full-time trading career entails high competition and volatility, so emotional stability is essential for dealing with the stress of trading.
“Trading is a profession that demands a high level of focus and discipline. It’s not for the faint of heart, but for those who are willing to put in the work and stay the course.”– Paul Tudor Jones
What Qualifications Do You Need to Begin a Trading Career?
There are a variety of ways through which you can begin a trading career, but if you are not certain where and how to begin, often having a background in finance and business can equip you with the essentials to get started. An online course from a reputed provider can be a smart step to start your trading career. You can gain an edge by studying trading skills, trading strategy, and trading psychology.
How to Start a Trading Career?
For a successful trading career,
- Educate yourself first
- Identify the type of trader you are
- Recognize the trading skills you need
- Start with a demo account
- Move up the ladder to a real account
- Set risk management targets
- Try to network
Having a professional trading career used to be out of reach for most people. Not anymore. With smartphones, anyone can now potentially turn this hobby into a viable trading career. Take a look at the best trading app for a successful trading career!
How to Start a Trading Career from scratch in 2023?
For those with a love of finance and a desire to take calculated risks, a trading career might be a rewarding choice. However, setting up a successful trading career from scratch may seem overwhelming, as many beginners aren’t sure how to handle the complex market. Let’s take a closer look at how you can build a successful trading career even if you have very little money in your trading account.
Trading is not a job, it’s a lifestyle. It requires dedication, passion, and a commitment to ongoing learning.– Yvan Byeajee
Step 1: Select a Trading Instrument
Financial markets differ significantly in their strategic planning and their necessary level of risk. It’s important to recognize this to establish a reliable understanding of them before you trade.
- Forex (FX) is the world’s most liquid and decentralized global market for currency trading with a daily trading volume of over $7.5 trillion. Forex trading operates 24/5 across different time zones, accessible via electronic trading platforms provided by forex brokers.
- Shares, usually referred to as stocks, are a well-liked trading tool that makes it easier to acquire and sell bonds and publicly traded assets. Supply and demand determine the stock price. Stocks are purchased by investors for a variety of objectives, including dividend payments, long-term growth, and short-term profit.
- Commodities trading offers a great deal of profit opportunities, but it is also risky due to the nature of the market. Precious metals like gold and silver, energy commodities like oil and natural gas, agricultural goods like wheat and corn, and industrial metals like copper and aluminum can all be considered among these commodities.
- Cryptocurrencies are digital currencies that can be speculated on just like physical currencies. These digital or virtual currencies use cryptography to secure and verify transactions and operate on a decentralized peer-to-peer network. Prices can be highly volatile and trades happen 24/7 on exchanges worldwide.
- Indices trading is for you if you are interested in dealing with the performance of a group of shares rather than a single company. Stock indices tend to be more volatile than individual shares since there are many constituents that can influence the market.
Diversifying your portfolio can be a great idea if you want to trade all the assets mentioned above. Portfolio diversification refers to a strategy of investing in a variety of assets to reduce risk while earning the best return possible in the long run of your trading career. With thoughtful and measured planning, it helps you manage investment portfolio risks.
Step 2: Find the Right Broker
Choosing the right broker is crucial to a successful trading career. A good broker will provide a reliable and user-friendly trading platform, ensure regulatory compliance and security, offer competitive fees and commissions, provide responsive customer support, and offer educational resources to help traders improve their skills.
Conversely, a bad broker may have a slow and error-prone trading platform, lack regulatory compliance, charge exorbitant fees and commissions, have poor customer service, and offer no educational resources. Therefore, traders must conduct thorough research, compare options, and select a broker that meets their needs and expectations.
Here are 10 tips to choose the right brokerage platform for a successful trading career!
Step 3: Choose your Trading Style
Trading styles cannot be universally applied to all traders as each trader’s personality, time constraints, and profit goals are unique. Every aspiring trader must take the time to assess what position and job description best fits their talents and interests in order to have a successful trading career.
- Day trading is the practice of buying and selling financial products on the same day in order to take advantage of price fluctuations. Day traders may sell short if they anticipate a decline in prices and utilize technical analysis to make quick judgments about whether to buy or sell. Trading of this nature entails risk and calls for expertise.
- Swing trading is a medium-term trading style that aims to profit from capturing short-term price movements in stocks, commodities, currencies, or other financial instruments. Swing trading might be the most advantageous trading strategy for newcomers. Before taking a position, a swing trader tries to forecast when and where the price will move next. When the asset value fluctuates, they ride it.
- Scalping is the most popular short-term trading style that entails taking and closing positions in a matter of minutes or seconds. Since scalpers may only make little earnings from each trade, scalpers must execute hundreds of trades in order to make a sizable profit on a typical trading day. Even though these short-term trades only involve a few pips, if they are not executed carefully, they can cause large losses.
- Position trading is a popular long-term trading style, in which traders hold positions for extended periods of time, typically months or years. It entails spotting and following a trend over time. Compared to short-term traders, position traders base their strategy decisions on more precise fundamental analysis and long-term trends. Position traders typically don’t trade actively, and long-term buy-and-hold investors frequently outperform them in terms of keeping their holdings.
Here is a guide to teaching you everything you need to know about trading style and how you can use it effectively for your advantage in your trading career.
Step 4: Become familiar with Market Analysis
Building a successful trading career demands an in-depth knowledge of market analysis. Studying market behavior and applying technical and fundamental analysis to make trading decisions based on market characteristics like price fluctuations, trading volume, patterns, and economic indicators is the goal of market analysis.
Technical analysis is a way of forecasting future market trends for an asset by analyzing its historical price and volume data. By analyzing charts, it is believed that market trends repeat over time and can be discerned from those trends. Technical analysis provides a structure for analyzing price movements, identifying promising trading prospects, and spotting entry and exit points for trades.
Fundamental analysis is a method for forecasting future prices based on the key factors driving financial markets. It comprises assessing the overall status of the economy and examining numerous fundamental aspects like as interest rates, unemployment rates, GDP, international commerce, and manufacturing to determine their impact on the asset’s value. Fundamental analysis, is advantageous for long-term investing as it provides insight into possible development and profitability.
Technical indicators are mathematical tools used in technical analysis to assist traders in making decisions regarding the buying and selling of financial assets. Technical indicators provide objective data based on price and volume, which helps traders identify market trends and potential price movements. This helps traders remove emotions from trading decisions, manage risks better, and generate trading signals.
Step 5: Create a Trading Strategy
Make sure you come up with at least two different trading strategies before you put money at risk. Have a well-thought-out plan that you can implement before entering a market. Describe how you plan to enter and exit the market, what kind of capital you plan to invest, how often you plan to trade, and what the trades will be worth.
- Long-term trading strategies involve maintaining positions for an extended period, ranging from several months to several years.
- Short-term trading strategies aim to gain profits from slight price movements in the financial markets. These techniques require opening and closing positions within a single trading day or a few days at most.
- Automated trading strategies entail the use of computer programs or algorithms to automatically execute trades based on predefined criteria or rules. They are also known as “algorithmic trading,” “black-box trading,” or “robot trading.”
Finding the most suitable strategy may take some trial and error, so it’s essential to be persistent and patient for a rewarding trading career.
Step 6: Practice on a Demo Account
Beginners frequently make inaccurate assessments of themselves and dive headfirst into live trading with real money. But because trading is constantly changing and improving, a full-time trading career might be a lot of labor all at once. Your best bet for learning the ropes when you first start off is to open a demo account.
A demo account is a cost-free trading account backed by artificial funds that traders can use to test their trading methods, learn how to trade, and get a feel for the brokerage platform. A demo account is the best way to investigate, experiment with, and learn more about trading in a risk-free setting.
Demo accounts, however, are less beneficial than genuine trading accounts since they lack the emotional commitment that comes with actual trading. The day will come when you are prepared to continue with real trading as you progress through the learning process. Here’s when to take a decision of moving from a demo to live trading if you’re a novice trader.
Step 7: Set up a Trading Plan
A trading plan is an all-inclusive strategy that incorporates objectives, trading tactics, and risk tolerance. It is a way of decision-making for traders that aids in choosing what to trade, when to deal, and how much to trade. It is merely a framework that has been built to direct the complete trading process.
To create a successful Forex trading plan, follow these easy steps:
- Define your trading goals: Decide what you want to achieve before you get started trading. Financial targets, trading frequency, and risk management goals can all be part of this process.
- Choose your trading style: The three main trading styles are day trading, swing trading, and position trading. Choose an approach that suits your personality and goals.
- Determine your risk tolerance: Your trading activities should be based on how much risk you are comfortable with. You can use this information to determine position size, stop loss levels, and other risk management measures.
- Use technical analysis: Technical analysis involves analyzing charts and identifying trends and patterns in the markets using indicators. In this way, you can make better trading decisions.
- Develop a trading strategy: Beyond a clear framework for evaluating market conditions and placing transactions, an efficient trading strategy includes a clear entry and exit strategy.
- Manage your emotions: Trading can be emotionally draining, and managing your emotions is the key to avoiding impulsive decisions.
- Test and refine your plan: Try out your trading strategy in a demo account or with small amounts of real money after you have developed your plan. You can improve its effectiveness by making adjustments as needed.
Underestimating the significance of creating a trading plan at the onset of one’s trading career is crucial. A meticulously crafted trading plan can be the determining factor between a lucrative and unprofitable trading career on the financial market.
Step 8: Get started Small and Grow from there!
Many new traders often think that they require a large amount of capital to start trading, but this is not necessarily true. It is possible to achieve success in trading even with small amounts of capital, as exemplified by a cent account. A cent account allows for trading with smaller transaction sizes, as it is measured in cents, where 1 USD equals 100 cents. This means that with a minimum lot size of 0.01 lot, anyone can enter the financial market and begin trading with very little capital.
Starting with small capital is also a smart approach that can help you develop a consistent trading habit and gain familiarity with the trading environment. It also provides a secure space where you can experiment and learn from your mistakes without incurring significant losses in your trading career.
Explore the 10 most effective trading tips that can help you grow your small account into a six-figure account or more!
Step 9: Get involved in the Trading Community
Participating in trading forums can offer several benefits to your trading career. Initially, you can enhance your trading abilities by acquiring knowledge from the expertise and experiences of other traders. Secondly, by joining trading groups, you can share your ideas and techniques and receive feedback and criticism, leading to improvement in your trading approach.
Thirdly, these forums can provide you with up-to-date market news and events, which can help you make more informed trading decisions. Lastly, interacting with other traders, brokers, and professionals in the industry can expand your trading prospects, creating new opportunities for your trading career.
If you are interested in trading and wish to become famous among the most respected traders, it is not just about how good you are at analysis and recommendations, but also about how you brand yourself in the market. Here’s how to position yourself as a go-to trading expert on the market!
Step 10: Become an Influencer and/or Introducing Broker
In recent times, trading businesses have become one of the most lucrative and promising revenue-generating opportunities available to young entrepreneurs today. Few of the most popular terms circulating in the financial markets are Introducing Brokers, Finfluencers and Trading Affiliates.
- Introducing brokers, also known as IB, are typically business partners who work with brokerages to bring in new clients to the firm and earn a commission for doing so. A Forex IB can be either an individual or a business entity that acts as a middleman between the brokerage firm and the trader.
- Finfluencers are social media influencers who offer financial advice to adults and educate kids about finance through their social media platforms. After establishing yourself as a trading expert, it’s time to generate passive profits as Finfluencers by forming partnerships with brokerages who value your reputation.
- Trading affiliates are marketers who promote a product or service offered by a broker and earn a commission by doing so. What makes the Forex affiliate marketing business very appealing is the fact that it allows anyone to earn passive income from their online presence.
As millions of new players have entered the financial market these past two years, having a trading career have now become increasingly popular in almost every corner of the world.
Ready to trade? Open an account today!
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Getting Started With Trading – FAQ
Is trading a good career?
A career in trading can be rewarding and stimulating if you possess the right skills, discipline, and emotional control to succeed in highly volatile and competitive markets. Nonetheless, it is also potentially stressful and risky, and success is not always assured.
How do I start a trading career?
1. Start by educating yourself on the basics
2. Determine your trader style
3. Begin with a demo account
4. Gradually shift to a real account
5. Establish risk management objectives
6. Keep a trading journal
Do traders make good money?
Making good money as a trader is indeed possible, but it depends largely on one’s ability to navigate the market, experience, and the amount of capital invested. While trading forex, equities, and commodities offers many lucrative opportunities, it also entails certain risks, and losses are a possibility.
Is trading a good career in future?
Trading is a potentially lucrative career for those with a strong interest in finance and analytical skills. Success requires a deep understanding of market trends and the ability to act on new information quickly. However, the industry is highly competitive and demands dedication and hard work to succeed.
How do I start a career in trading?
To embark on a trading career, it is necessary to acquaint oneself with financial markets and investment strategies, gain experience through the use of practice accounts or accounts with limited capital and employ relevant risk management techniques. Enhancing your trading skills, adopting effective trading methods, and cultivating a trading mindset can give you a competitive edge.
Is trading a profitable career?
Trading has the potential to generate profits, but it also involves risk. Success in trading career is contingent on a multitude of factors, including market conditions, skill level, and risk management strategies. Trading is not a get-rich-quick scheme, as it necessitates an investment of time, effort, and capital.