Since it’s a topic that is never really covered in school, finance can be especially daunting to learn on your own. In particular, many people want to learn the ins and outs of the stock market but have no idea where to even start.
There is such a steep learning curve that some people question whether it’s even possible to teach themselves at all. Luckily, it’s definitely possible to learn trading by yourself. You just need to know where to start.
This article will take a quick look at how you can learn trading by yourself.
Determine your financial goals
When you’re getting started with investing and trading, the most important step is to determine what your financial goals are. In this sense, starting to invest/trade is just like working out.
When you are starting a new workout plan, there are a lot of questions you need to answer. For example, are you trying to lose weight? Do you want to bulk up? Or are you just trying to improve your cardiovascular health and don’t care about your appearance?
You need to answer these questions so that you know what kind of workouts to do.
As far as financial goals, here are a few of the most common:
- Become rich as quickly as possible
- Build wealth in a relatively risk-free way
- Save money for retirement
- Save money for an alternative goal
Once you have decided what your financial goals are then it’s time to set your strategy.
Set a strategy
When it comes to trading stocks and investing, there are quite a few different strategies that you can use. For example, many investors will classify themselves by how frequently they buy/sell stocks.
- Day traders are buying and selling different stocks every day in hopes of turning a profit.
- Swing traders are will usually hold a stock for a few weeks to a month in order to capitalize on intermediate changes in price.
- Long-term traders are willing to hold a stock for months and even years to take advantage of the long-term growth in the price.
When it comes to how they make decisions, traders will also classify themselves as either technical analysts or fundamental analysts.
Technical analysts make decisions by looking at information behind the stock’s price and trading patterns. On the other hand, fundamental analysts will look at the financial information that a company releases in order to decide whether to buy or sell.
In all honesty, most traders probably fall somewhere in the middle. They might use technical analysis to take advantage of a quick trade but also use financial data from a different company’s reports and decide to hold that stock for the long term.
Even after you have established a strategy that fits your financial goals, there will still be a lot to learn. Investing is one of those skills where you should never stop learning.
The best way to educate yourself with trading is to talk with, read, and listen to experts. The best way to do this is to find a circle of traders or investors who you admire and follow along with things that they do.
It may also be beneficial to spend a few weeks or months simply learning the ins and outs of the stock market before putting your money at risk. In fact, many platforms will allow you to create and trade a fake portfolio (without actually buying the securities) so you can practice different strategies.
We hope that you’ve found this article valuable when it comes to learning whether or not you can learn to trade by yourself. If you’re interested in learning more, please subscribe below to get alerted of new articles as we write them!