Hey friends! We are again here with new topic. Every trader should have the below tools before start trading. This is because with out this, you could not able to success in short period of time. That's why these are called most essential tools & skills required in trading Short period means do not expect below 3 months. Yes, some of people after reading this may be leave the page, but why I am saying is very important for you, if you want to be a successful trader. Otherwise you won't be able to save your capital first.
I am here to prove my words!
Why it will take 3 months minimum time to become a trader?
Trading is a profession, you can not behave like a genuine person that they believe in investing. Investing is a soft skill that deposit a bunch of money periodically, that will grow as per time. But Trading is not like that. It is completely based on passion, focus, research, analytical skill, experience and most importantly technical knowledge.
If you think you can learn everything in a very small span of time, then also you are not gonna success in trading. Because only education won't make you success in this field. You need to understand the power of discipline, practice and patience. We will discuss about this in another topic.
Why it is essential to save the capital?
Capital is nothing but the money you brings to trade in share market. If you loose all your money, then how you can become a trader, and here you got full stop in your trading career. If you again bring a capital, then there is a same chance to loose that also, if you did not learn anything from previous loss. And then you will gonna say that Share market is a gambling, and only gambler can win. But my friend, this is wrong! This is all a game of probability. You can win it, if you can understand the use of probability.
So to understand the above there are most essential tools and skills you required:
6 Most important Tools:
- A well equipped Computer and strong internet:
Are you laughing on this? If you want to invest only, then you may not required a well equipped system. But if you want to become a trader, then it is most important, and you must have it. Market movements in each seconds and the research is based on all time movement. There is chart analysis, which is most essential to watch it full time to take trade. So, this is 1st in my list.
2. Trading Capital:
If you have a system, this is not enough. You must need capital to take trade and investment. You must need a minimum capital that you think, you can take the risk on such capital. You have to set mind, that if you gonna loose this amount, this won't let your family affect. I know, it will affect you, but that's okay. I know you can handle it, but keep in mind, this amount should not make trouble to your family. So, I will suggest, it should not be borrowed, because borrowed capital create worries.
3. Brokers:
In 3rd, There is must essential of a broker, who is the middle man between stock exchange and you. You can not trade directly with stock exchange such as (NSE, BSE). You need to join with a broker. And the broker should be useful for you. Like the broker, who provide full support with analysis and research on stock analysed by them and other financial services, they are known as full service broker, Ex: Angel Broking. They charged more AMC(Annual Maintenance Charges), Brokerage etc. and there are discount brokers, who focus only on buying and selling with satisfaction of trader with very less charges. The most effective brokers are: Upstox, Zerodha, Fyres. They all have unique features and best among all.
4. Charting and analysis software:
This is also most important after the above. Because without above you can't take trade, but without this trading will be like looking someone by closing your eyes. Chart and analysis software will guide you to research on the trade you gonna take and it will make you profitable, if you know how to use it better.
5. Books:
There are a lot of books who tells about the reality of stock trading. The legends of trading and investing share their knowledge, experiences and a lot that will really separate from others. There are some of books like: The intelligent investor, Rich dad Poor dad etc. A lot of books are there which are based on technical analysis, fundamental analysis.
6. Market research and Brief analysis:
After all above required elements, you also required the research and analysis which are available in news. It means, stock market news, Journals, research and analysis by the pro trader, Information of investment by big players etc.
Most required Skills:
1. Trading Education
This is very crucial, if you want to a trader. Without appropriate education you can't be a trader, either you can't save your capital and you will be kicked by stock market as much as you will become aggressive. Education is not a skill, perhaps learning is the skill. Learn from everywhere like, Youtube, articles, trading courses, trading work shop etc.
2. Technical & Analytical skill:
In education part, you will learn the various strategy, techniques to take entry and exit, but you need technical analysis. The skill to analyse the stock and to take trade in proper time. This skill will come with joining trading course and experience.
3. Research:
Research was is tools, because it was not your research. So, you need to acquire knowledge in this department too. So, you shall practice on analysing and making research on a lot of criteria to find a clear visual for taking action of trading.
4. Discipline:
There are 90% trader who does not succeed either they may have all the above. But if they don't have discipline, then they will flow with emotions and will loose the trades. So, maintaining discipline is very crucial element among the skill. You shall maintain some rule like
- 3 Stop Loss is the end of the day.
- Each Stop Loss won't loose more than 1-2% of capital
- Without research, not to jump into trade, etc.
5. Control:
Like discipline, control on emotion is very important. You need to have control on your trade like, a justified target should be there before entering into trade. And also a certain Stop loss should be there, if trade is going against you, it won't destroy all your capital invested in the trade. So, control is essential as others are.
6. Record Keeping:
This is last but not the least in our list. This is a movement where you keep record all of the trading activity. Maintain a journal daily and what are the trades taken. It will help you to analyse periodically, that what error causes makes you losses. You should use it as your own guide that will show your your strength and weakness. You should maintain the below in the journal:
- Stocks name that traded
- Type of transaction i.e. Buy/Sell
- Entry point
- Stop Loss point
- Target point
- What you achieve? like Target/ stop loss
- Why the trade taken (Price action/ trend break out etc)
- Chart pattern
- What need to improvise the trade.
I think this is a very good session, where all the necessary thing you understood. These are the best tools and skills that every trader should have. These all will make you definitely success. Because one of my Guru says, stock market analytical skill is not a rocket science, so you can easily learn it.
Thanks for reading🙏
Wise World 21st 🌏
If you have any doubt please let me know.