Welcome to my website where you can learn the most important rules that you need to learn to become a successful trader. Learn what to do and what you should never do.
Trading
In the world of financial trading, a lot of different asset types are bought and sold – such as stocks, currencies, cryptocurrencies, and commodities. For a lot of these deals, no actual goods are changing hands; everything is cash-settled. Traders can also use derivatives to speculate on the price movements of an underlying asset without ever owning the asset. Examples of derivatives are stock options, commodity options, futures, forwards, currency swaps, and Contracts for Difference (CFDs).
Trading vs. Investing
There is no sharp line that separates trading from investing, but investing is carried out with a longer time-frame in mind. Trading is short-term (such as day trading) or medium-term (such as swing trading), while investing tends to involve buying something intending to keep it for a year or more. With investing, you hope that the value will increase long-term, and you are willing to ride out short-term price fluctuations. Trading, on the other hand, is about profiting from short-term or medium-term price movements. A day trader will open and close all their positions within the same trading day, while a swing trader will keep a position open for a few days, weeks, or even months. Traders are in and out of the market often, looking for quick gains instead of long-term growth.
Types of Trading
Examples of different types of trading:
Day trading Buy and sell within the same trading day. No positions are kept open overnight, so you do not have to worry about overnight fees and that type of market risk. Day trading strategies normally aim to profit from fairly small price movements, and day traders tend to seek out assets where the liquidity is really high, e.g. trading the EUR/USD currency pair.
Scalping This is a subcategory of day trading. Scalping involves making extremely short-term trades to profit from very small price fluctuations. Scalpers typically keep positions open for any where from few seconds to a few minutes. Since the price movements are so small, scalpers need to make a very large number of traders in a day to earn a subsantial profit, and/or trade very large positions where each pip corresponds to a lot of money.
Swing trading Swing traders hold their positions open for a few days to a few months, based on trends or patterns. Since you will keep positions open over night, you need to find a broker that will not charge you exorbiant overnight fees. Compared to day trading, swing trading is less intense during the trading sessions, since you are capturing longer price trends.
Position trading Position traders typically plan to keep their positions open longer than swing traders, although there is a big overlap between the two categories since swing traders sometimes also keep a position open for several months. There can also be a bit of an overlap between position trading and investing in the other end of the spectrum, since it is not unusual for position traders to hold on to an asset for more than 12 months. Generally speaking, position traders do not go long in an asset planning to hold on to it through tick and thin, e.g. through several business cycles. They are still traders rather than investors, and they will normally close a position when the price reaches a specific target, rather than hang on to the asset indefinitely.
What Can You Trade?
Today, even small-scale retail traders (non-professional traders) using an online trading platform have access to a wide range of tradable financial instruments and products. Here are a few examples:
Stocks A good place to start is stocks listed on exchanges, e.g. on the New York Stock Exchange (NYSE). When stocks are traded outside exchanges (known as over-the-counter trading), there is less trader protection.
Forex The global forex (foreign exchange) market is the largest of all the financial markets, and it is active 24/5. Some examples of highly liquid currency pairs are EUR/USD, USD/JPY, and GBP/USD.
Cryptocurrencies You can speculate on cryptocurrency pairs such as BTC/ETH and on crypto/fiat pairs such as BTC/USD.
Commodities Through derivatives, you can speculate on the market price of traded commodities, such as gold, silver, platinum, Brent crude oil, natural gas, cocoa, coffee, and sugar.
Risk-Managment
Trading can be profitable, but it’s risky—especially for beginners. It is extremely important to have a suitable risk-managment plan in place and the discpline to actually stick to it, even when your emotions are telling your something else.
The market doesn’t care how much you “feel” something is going to go up. It moves fast and often unpredictably. Without a good trading strategy, proper risk management, and emotional control, it’s easy to lose money very quickly.
You do not need to be an expert to get started trading, but you should devote some time and energy to learning at least the basics and setting up rules for your trading strategy and risk-managment plan. Many people dive into trading without any preparation and burn out fast. If you’re interested, start small, use demo accounts, and take time to understand how markets move. Don’t treat it like gambling—treat it like a skill you’re building.
Trading is buying and selling for short-term profit. It can be exciting, intense, and (if done right) rewarding. But it’s not magic. It takes discipline, patience, and a solid grip on risk.
Leverage is a useful tool that can be very dangerous if it used to aggressively. Leveraged trades allow you to earn more money in a shorter amount of time. The flip side of this is that you also can lose money a lot faster. Some FOREX and CFD brokers allow you to trade with a 1:200 leverage (sometimes more) this means that you will win or lose 200 the change in the traded instrument. If the instrument goes up 1% in value you will earn a 200% return on your investment.
It is possible to lose more money then you invested when you use leveraged products. If you do not know what you are doing you can end up in deep debt from one unfortunate trade. Read more here.
Never trade with financial instruments you do not understand
There are a number of heavily promoted financial instruments such as binary options that can be very dangerous to trade with if you do not understand how they work. If you do understand them then they become powerful tools that can help you earn a lot of money quickly.
It is very important that you study any financial instrument before you start trading in it. If you do not understand a financial instrument then there is a big risk that you will lose money while trading in it. The more you know about binary options and other exotic financial instruments the more money you can earn while trading with them. Read more about binary options by visiting http://www.binaryoptions.co.uk/.
Always use a trading plan when trading in securities
You should always have a plan when you are trading with securities. Know your goals and what type of portfolio you want to build. If you do not have a formulated plan you risk ending up with an unbalanced portfolio driven by whims. Read more here.
Always use a stop-loss or similar protection
A stop loss is a great way to avoid losing money in the event of a stock market crash or other market crash. The stop loss will automatically sell your stocks when their value sinks below a certain point. This way you avoid owning your stock during the crop in the market and can use your liquidity to buy more stocks later when they have hit the bottom. A stop loss is a very valuable tool that can make a stock market crash something very profitable. Read more about different types of stop loss orders.
Never be pushed into making a trade
You should never allow yourself to be pushed into a trade by someone else. Trust your own judgment and to not invest in projects you do not think are going to work out. This is true regardless of whether the person trying to push you into the trade is an experienced trader or not. It is especially important to never get pushed into a trade by a financial adviser. They might not have your best in mind when they are trying to get you to invest. Read more here.
Never invest without taking time horizon into account
Your investment horizon will have a large impact on what investments that are suitable for you. If you know that you are going to need the money you invest in a short amount of time you need to avoid all risky investments. If you have a longer time horizon you can accept more risk. Read more here.
Always diversify
It is very important to diversify your investments as much as possible. This will help you reduce the risk that you are being exposed to. If you diversify your investment your portfolio can do well even if one of your investments are doing badly. Diversifying your investment does not mean just buying a few different stocks in different industries. It means building an investment portfolio containing many different types of financial instruments as well as real-world assets such as real estate. Read more about why you should always diversify.
Never risk more than you can lose
Never invest money if you can not afford to lose them. If you are going to need the money within a few months it is better to not invest them at all. Investing money that you can not afford to lose is a recipe for disaster. Read more here.
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Always adjust your investments to your situation in life
Your life situation has a very large effect on what types of investments you should make. If you are young and single you can take more risks than you should do if you have young children or if you are close to retirement. You can read more about how you should invest based on your life situation here.
Never follow advice blindly
You should never follow any ones advice without first doing some research and forming your own opinion on the suggested investment. How much research you should do depends on how is giving you the advice. If it is a person that you have invested with for a long time you can trust his advice more. If you get advice from a financial adviser you should be a lot more skeptic and do more research. Financial advisers are not required to but your interest ahead of their own and they often get a large commission for referring you to different brokers. Financial advisers get large amount of money when they promote binary options, annuities, FOREX, and CFD:s. Most advisers give good advice but you should still do some research before you follow their advice. Read more here.
Always use technology to your advantage
Use technology to automate any aspect of your life that isn’t a productive use of your time and you do not like doing. The more menial tasks you can cut from your day. The more time you can spend earning money. Read more here.
How to Start Trading
Starting your trading journey can feel exciting—and totally overwhelming. Stocks, crypto, forex, options, charts, brokers, apps… it’s a lot. But here’s the good news: you don’t need to know everything to get started. You just need to start the right way. Trading can be a powerful tool—but only if you respect the risks and avoid rushing in blind. Below, we will take a look at a few points that can help you get startet trading and reduce your risk falling prey to some of the most common pitfalls for novice traders.
Learn the Basics
Before you put a single penny at risk, learn the basics of trading. You don’t need a finance degree, but you do need to know the basics about how markets work, how orders work (buy, sell, stop-loss, limit, etc), what affects price movement, how to select a broker, and more.
You do not need to enroll at university or pay $$$$ for some ”trading bootcamp”. YouTube, free courses, trading blogs, and books are great starting points. Once you have the basics in your toolbox, you will also be more equipped at telling which courses might be beneficial for you, which ones that are not highly relevant to your trading strategy, and which ones that are just utter bullshit.
Do not get all your information from one source.
Learn how to be a critical consumer of trading information.
Learn about several different viewpoints, instead of getting stuck with one one then dismissing all the others without much tought.
Be highly suspicious of anyone who tries to downplay the inherent risks of trading.
Don´t buy scammy trading products that promise you huge profits, risk-free, with no effort. If that guy had a product like that, he would be using it, not trying to sell it to you for $499.
Choose What You Want to Trade
Stocks, cryptocurrency, forex, commodities, indices, even NFTs, and a profusion of derivatives. It´s all available out there. Don’t try to trade everything at once. Pick one market to start with and learn how it moves.
Let´s say you picked forex. Now, create a trading strategy that involves one or possibly two currency pairs. You have probably heard a lot about the importance of diversification, but jumping at every possible opportunity, trading USD/EUR this minute and a bunch of exotics the next, is not the way to go about it. Pick one or two currency pairs, learn more about them, and become really skilled at trading them. Later on, you can decide if you want to go through the process with another pair, or stick to the ones you know. For many novice traders, that urge to jump on every opportunity and trade a wide range of currency pairs will cool down considerably once they start seeing a steady stream of profits from the one or two pairs they are now specialized in.
Pick a Suitable Broker and Trading Platform
Before you place your first trade, you need the right place to do it—and picking the wrong broker and trading platform is one of the easiest ways ruin your profitability and trading experience.
You need a broker and trader account where the fee structure is suitable for your particular trading strategy. You also need a trading platform that suits your strategy, has the necessary risk-managment tools for your risk-management plan, and offer any other support your need, e.g. support for technical analysis. Your trading platform is basically your cockpit. If it’s clunky, untrustworthy, or doesn’t do what you need, your entire experience suffers.
So how do you actually choose a broker and trading platform that fits your needs and goals? One good way is to go to DayTrading.com and read their reviews of brokers. Here are a few things to keep in mind as you read their reviews.:
Regulation
For most traders, it makes sense to pick a broker regulated in their own country, to avoid legal complications. If an issue would arise between you and your broker, it is easier to resolve it when you are in the jurisdiction from whence the broker has gotten its license. For traders in a European Union membership country, a broker with a license from any of the EU membership countries will do, since a license from one of the membership countries is valid in all the mebership countries.
With that said, some countries do not regulatedonline retial brokers, or regulate and supervise them in a very lax way that does not give traders much in the way of actual legal protection. For traders in such countries, it can be better to pick a broker licensed by one of the stricter countries. Still, you might not get the same high level of legal protection as the traders actually residing in that country, and you will probably not be covered by any governmental insurance protection for traders.
Where a broker is based matters. Not every broker or platform is legal in every country, and some brokers and platforms offer different features depending on your country or region.
Before signing up, double-check:
Is the broker and platform allowed in your country or state?
Is the broker registered and licensed with any regulatory body? Which one? Can you confirm the license directly with the issuer? Some scammers lie and claim to be licensed by reputable financial authories.
If the broker seems to be dodging legal questions or lacks clear licensing, take that as a warning sign. The same is true for brokers who are based in and licensed by very lax countries with poor trader protection.
Security
This is non-negotiable. You’re trusting this broker and platform with your money, personal info, and potentially sensitive trading data. At minimum, the platform should offer strong security features like two-factor authentication (2FA), data encryption, and account alerts. You also need to be able to transfer money to and from your trading account in a safe way.
A user-friendly trading platform
If you’re new to trading, the platform should make things clear—not more confusing. You should be able to do basic things like finding your account balance, place an order, set a stop-loss, and read a chart without needing a 60-minute tutorial for each step.
Some platforms are built for beginners—clean interfaces, simple design. Others are inteded for more experienced trader; they are loaded with a lot of features and tools, but the learning curve can be steep.
Can you trade what you want?
Make sure the broker and platform actually offer the assets you want to trade and the instruments you want to use, and provide excellent terms and conditions for your trading strategy.
Cost structure
Costs eat into every trade, and each penny you spend on costs is a penny you can´t put to work. It is important to pick a broker and trading account that is suitable for your particular trading style. A scalper doing thousands of tiny trades each day can not pay big fixed buy and sell commissions as still make a profit. A swing trader do not want to get stuck with a broker that is charging exorbiant overnight fees.
Examples of costs:
Trading fees, also known as commissions. Both purchase commissions (open a position) and sales commissions (closing a position) exists. Commissions can be flat (fixed commission) or a percentage of each trade. Sometimes, there is a minimum fee that must be paid even on tiny positions.
Spreads. The difference between the buy-price and the sale-price with this broker. Brokers normally make a bulk of their money from the spread. As a trader, you want tight spreads. Wide spreads will erode your profits.
Deposit and withdrawal fees charge by the broker for processing your deposit or withdrawal request. (You can also expect to pay the actual transaction company, e.g. VISA , for carrying out the transaction, and that will be a separate fee.)
Some brokers advertise commission free trading. Before you sign-up, make sure you know:
How wide is the spread? Some commission-free brokers compensate themselves with wide spreads, since many novice traders are confused about how spreads actually work.
Is the commission-free trading available for your particular trading strategy, e.g. forex trading the USD/JPY pair.
Customer support
Platforms freeze. Logins fail. Transfers get delayed. When anything like that happens, you want a support team that responds quickly and actually solves your problem.
Read reviews about customer service experiences, and also test the support yourself before you commit. Send a question or make a call, and see how long it takes to get in contact with the support, and how long it takes for them to answer your question. When your money’s on the line, you don’t want to be left waiting.
If the broker only offers email support, you will not be able to get step-by-step guiding in real-time.
Real reviews from real traders
Ignore the reviews that sound like they were written by bot or paid shills. Look for user feedback that seem human and talks about actual issues: withdrawal problems, slow app performance, hidden fees, or account holds. Seek out good trading forums when you can read unfiltered opinions. If the same complaint shows up over and over, pay attention.
Use a Demo Account Before Putting Any Real Money At Risk
Before you make any deposit, we strongly encourage you to open a free demo account with the broker you are interested in, and use it to find out several things:
Is this platform suitable for my preferences and my trading strategy?
Does this platform work well on my device / devices?
How well does my strategy and risk-management plan work against real market data?
By using a free demo account and make play-money trade, you can find out if the broker and platform is suitable for you before you committ any money or part with any sensitive information. It is much better to find out sooner than later.
Most of the reputable brokers will let you sign up for a free demo account without paying any money and without going through the full sign-up process. A free demo account lets you practice with fake money against real market data, so you can test strategies and get a feel for how fast things move without risking anything.
Practice placing orders, setting stop-losses, and managing trades. Track what works and what doesn’t. One of your goals now is to build confidence and experience before your real money hits the table. You will also have time to develop a basic trading strategy and test-run it against real market data, without losing any real money.
Do not skip this step. Having a trading strategy and testing it is really important. It does not have to be complicated – just don´t wing it or “go with your gut feeling”.
Even if your strategy is basic, have one. Maybe it’s trend-following. Maybe it’s buying dips. Maybe it’s trading news events. Whatever it is, write it down. Define your entry point, exit point, and risk per trade. Start with something easy to follow. Complexity doesn’t equal success. Also, learn about curve fitting and why that is a bad idea.
You will need a suitable risk-management routine that will go hand in hand with your trading strategy.
Risk-management (or rather, failing to do proper risk-management) where most beginners blow it. They overtrade. They go all in. They ignore stop-losses. The get greedy and keep positions open for too long. Don’t be that person.
Set a limit on how much you’ll risk per trade (1–2% of your total account is standard). Always use a stop-loss, and preferably also a take-profit order. Protect your capital. You’re not delusional enough to think that you will profit from every trade. You’re trying to stay in the game long enough to get good and build consistent profitability.
How to Open An Account
Once you’ve picked a broker and trading platform, it’s time to sign up. You’ll usually need:
Full name
Email address
Phone number
Proof of ID (passport, driver’s license, etc.)
Sometimes also proof of address (like a utility bill). With some brokers, this will not be required on sign-up, but will be required later, as a part of the KYC (Know Your Customer) check. The KYC might feel invasive, but it’s normal and it’s there to prevent fraud and money laundering.
Before you go any further, lock down your account. Set a strong password. Enable two-factor authentication (2FA). If the platform offers withdrawal limits or whitelists, learn how they work and decide if you want to use them.
Funding Your Account
Once you have got enough experience in the demo account, signed up for a real-money account, and verifyed it, it is time to put some money in. Most platforms give you several funding options, such as:
Bank transfer
Debit card
Credit card
E-wallet, e.g. PayPal, Neteller, Skrill
Cryptocurrency transfer (many brokers do not permit this)
Start small. Test the system with a small deposit to make sure everything works. If a broker is offering you a big bonus on your first deposit, it is actually a bit of a red flag, because most of the reputable financial authorities with strong trader protection prohibit brokers from using welcome bonus offers to entice retail traders into making a big first deposit.
Your money might not be available immediately. The transaction itself can take time, and some brokers will show the funds in your account but hold them frozen for a couple of days before you can trade. Be patient and double-check your available balance before placing any trade.
With some brokers, your deposit method is automatically also your withdrawal method. With others, you will need to actively select a withdrawal method. It can be a good idea to make a small withdrawal fairly early on, to make sure everything works. There might for instance be another step in the Know Your Customer check that needs to be completed, and it is nice to get this out of the way.
Review, Reflect, and Adjust
Keep a trading journal. On some platforms, a lot of support for this is built in.
Use the trading journal to go back, analyze and reflect on your trades. Review what has been happening. Notice patterns.
Why did you enter these trades? Why did you exit at these specific price points? What worked well? What didn’t?
Make notes for every trade, and include not just the numbers, but also your thought process. This is how you spot patterns and improve as a trader.
