Traders venture into the market with lots of expectations. This is not surprising considering the $5 trillion daily trade reported by NASDAQ. There is also a lot of positive information about trading out there that tends to give budding traders the wrong idea about the market. The truth about trading is that the market is not always accommodating. Indeed, statistics prove that the majority of traders never make it through the first year of trading.
This is not to mean that the market is an impossible one, not at all. There are many traders with success stories all around. But these traders mastered the art of trading within their first year of trade. So what lessons are there to learn? What can you expect during your first year as a trader? Let us explore this in the following points.
Making Many Mistakes
The first thing you can be guaranteed of doing is making mistakes. In the world of financial markets, even the most careful trader is bound to make some mistakes. 1 in every 3 young people avoid investing because they are afraid of making mistakes. You should not be dissuaded by mistakes though. Mistakes provide some of the most valuable lessons that you would otherwise not know about without trading. The typical market is defined by many different tools, strategies, new experiences and other issues. It will not be possible to get a grasp on every single thing at the first instance. You should thus be prepared to take on the market with an open mind. Treat all mistakes as part of learning and encourage yourself to move forward.
Low or No Returns
Another issue you will deal with, especially during your early days of trading, is the lack of returns. A huge percentage of traders do not make money during their initial days of trading and this is not abnormal. Making money depends on the amount of time you have spent learning about the market and the information available to you. This is why your focus should not be on the money itself but the process. You should focus on learning as much as you can to trade with certainty. Patience is a huge part of trading and you need to learn how to be patient with the market even in the most difficult times.
New Tools and Concepts
Trading is also facilitated by various tools. You will find indicators, forex apps, strategies, and other things. Some of the tools you will find will be unfamiliar to you. You will also encounter new concepts that you have to learn about. Every person who ventures into the market for the first time always has something new to learn. It does not matter whether you have taken courses before venturing into trading as the practice itself is different from what you might know. The focus during your first year should thus be on familiarizing yourself with the new tools and concepts. The quicker you learn about the tools that work best for you, the faster you will achieve your goals.
Different Strategies to Choose From
61% of adults in the USA find it difficult to invest because they are intimidated by the market. You will encounter various market strategies that might be intimidating. The exciting thing about trading in the financial realms is that you can explore different mechanisms of achieving your goals. Numerous techniques have been developed over many years which can yield great results when used tactically.
During your first year, you will learn about these strategies. You will also learn that not every strategy is good for you. Trading is a very personal affair and different traders choose different approaches that are suitable to them. As a first-time trader, you should explore all the various trading techniques available and find out which ones are good for your trading style.
Unending Learning Opportunities
Finally, your first year will be all about learning. You will learn how to manage your expectations, how to use your capital wisely and if the market is right for you. Financials account for about 16% of trade and the overall market is much bigger. All traders venture into the financial realm without a clue of what the market is about. After a while though, many simply decide to quit or to pursue the market further. Every learning opportunity that you encounter will thus be of value. Learning will affect the decisions you make during your first year of trading.