The other day I had a note come in from a young prospective trader:
I have just ordered your book [easyazon-link asin=”047179063X”]The Essentials of Trading[/easyazon-link] and I look forward to it. I am an 18 year old from London who has always had an interest in trading but I’ve never pursued it.
Are there any tips that you could offer someone with absolutely no experience. For example, what to keep an eye out for in regards to FOREX stocks, books to read, papers to read etc.
I look forward to hearing back from you,
It’s always interesting to see younger people coming into the markets. When I wrote the book it was largely meant to be a companion text for a university trading course I was helping develop and teach. I needed something that covered general principles that I could use to work with a group of students who had a theoretical market understanding, but no real experience – basically, people like Ciaran.
In terms of advice for those just getting started, I would offer a couple of things.
Trade as small as you can get away with.
When you’re just starting out you have a lot to learn and are almost certainly going to lose money. Best to lose as little as you possibly can during this stage.
Once you have the basics down, do some real-money trading
There is a major difference between demo trading and having your actual money at risk. You need to understand the impact playing with real money will have on your trading psyche. This will inform your decisions on time frame, style, etc. For that reason, I suggest at least getting in a few live trades as early as practical to get a sense for it before going back to demo to work on systems, methodology, etc.
Experience makes a massive difference in trader performance, which is something that I plan on discussing in the new book I’m developing. Realize that it will take time for you to learn what you need to learn and to settle in to a good personal trading style – potentially years.