Before venturing into the trading stock market, you must have heard that about 90 percent of the investors lose their money when trading the stock market. The statistic is somewhat true because at least 80 percent of the traders lose their money over time, 10 percent break even, and only 10 percent make money consistently when trading the stock market.
These figures are not based on age, gender, level of intelligence, or geographical region. Anyone can make money or lose money while trading the stock market. So, every trader strives to be among the 10 percent of investors making money trading stocks. Unfortunately, few investors want to put time and effort to reap the benefits of trading the stock market. To succeed as a stock trader, you must be willing to do what 90 percent of traders don’t do. But how does a newbie work this out from the tons of information out there to know what they should be doing?
How to Succeed as a Stock Market Trader?
There are three basic rules to follow if you want to have a successful career trading stock.
1: Acquire knowledge
2: Develop experience
3: Put in the effort
Lack of Knowledge
Many investors fail to make money trading stock market because they lack the relevant expertise. If you want to succeed in trading stock, you have to invest in education. Attend conferences and seminars to learn from experts. Research thoroughly to learn about the different trading techniques and the current trends in the market.
An educated stock trader knows the importance of coming up with an effective trading plan, and they also know how to analyze the stock market. They also know how to manage their money and implement critical money management rules such as position sizing and stop-loss to maximize profits and minimize losses.
Have Realistic Expectations
You can’t attend a one-week course or read a few books and claim that you are ready to trade the stock market. It takes more than one week to be able to trade successfully. The best thing to do is to find a reputable platform such as Saxo and sign up for a free demo account. Take your time to learn the basics of trading stock until you are sure you want to register for a live trading account.
Many traders are driven by the desire to seek instant gratification, and therefore they don’t take time to learn the basics of trading the stock market. Many expert traders spend more than two years learning the ropes in the industry. Remember that the goal is to be among the 10 percent of traders who make money consistently trading stock market.
Learn to Deal with Emotions
To become a successful stock trader, you have to learn how to deal with emotions. The way you deal with emotions will determine your success as a stock trader. Your emotional status will determine how you approach the stock market. For instance, the feelings of greed and fear can lead to deadly mistakes if you don’t know how to control them.
Greed mostly comes into play when a trader has very little money to invest, yet they want to put their money in highly leveraged markets such as Contract for difference (CFD) to earn high returns. In such a case, the trader is investing in emotions, and there is a high chance of making deadly mistakes that can lead to losses. If you want to succeed as a stock trader, you have to learn to look at the stock market objectively.
Besides greed, some traders have a lot of fear when it comes to the trading forex market. Fear is worse than greed. Mostly, anxiety stems from a lack of knowledge or confidence in the trading plan. The best way to deal with fear is by equipping yourself with all the relevant expertise. Always remember the tips mentioned above, and you will soon be an expert at trading the stock market.