Learn to Trade: A Step by Step Guide
Reading time: 12 minutes
Trading the financial markets has never been more accessible than now. With just an internet connection and laptop, you could be trading the trillion dollar forex market, the world's biggest American corporations in history, or the price of oil from the richest cartels on earth - among many others.
However, with so many choices - over 3,000 tradable markets - where to start and how to start can be quite daunting and overwhelming. This is why it is important to learn to trade the market in a structured way. Through step by step trading training, you have a far better chance of knowing how to trade with confidence, purpose and success - for the rest of your trading career.
Whether you are trading for retirement, a secondary income source or just for the interest and curiosity of the world's financial markets, when it comes to finding out how to learn trading, where do you start? Right here of course!
In this article you will discover:
- How to trade with the best tools, platforms and products in the financial industry
- How to learn trading so you can find the very best trading strategy for you
- Where to learn the techniques of some of the very best traders in the world
- The 'Learn to Trade 4 Step Trading Plan' so you can take action straight away
- Where to find the best free trading tools, so you can access and learn from professional traders
Let's get started!
How to Trade
Before you start to learn how to trade the market, it is important to have the right trader setup from the outset. After all, there is no point going through a number of trading courses on how to trade, only to find out you don't have the right trading tools and products to execute your trading ideas and strategy.
Here are just some of the trading tools you need, to start learning how to trade:
1. A Broker
If you want to buy the euro, gold, or shares of Apple stock, you need to find someone who owns what you want and is willing to sell it to you. This is what your broker does for you. Through their platform, they will connect you to other buyers and sellers in the currency market or the stock or futures exchange your product trades on.
You may never meet the person on the other side of your trade but thanks to super fast and innovative technology, you can buy and sell the world's financial markets in seconds using market orders placed with your broker. As your broker is where you deposit your capital to trade with, make sure they offer the highest regulation possible - so you know your capital is as safe as possible.
For example, investment firms operating under the Admiral Markets trademark offer the highest regulation from the UK's Financial Conduct Authority, the Australian Securities and Investments Commission, and Estonian Financial Supervisory Authority and Cyprus Securities and Exchange Commission. Not only that, but the platform also includes a negative balance protection policy to protect you from adverse movements in the market.
2. A Trading & Charting Platform
Your trading and charting platform help you to view historical price charts of the instrument you are trading, as well as provide you with the order tickets you need to place and manage your trades. Some people may have a charting platform that is separate from their brokerage platform. With the advent of advanced trading technology, you can now have your charting platform and brokerage platform all in one place with the MetaTrader suite of products.
Admiral Markets offers the following MetaTrader trading platforms:
- MetaTrader 4
- MetaTrader 5
- MetaTrader WebTrader
- MetaTrader Supreme Edition (A custom plugin for MetaTrader 4 and MetaTrader 5, created by Admiral Markets and professional trading experts)
Through the above platforms, you can trade across a variety of markets such as indices, commodities and shares. And, if you are keen to learn how to trade forex, all of the above platforms also offer forex trading.
Most importantly - with these platforms - you can trade on a demo trading account so you can implement the 'Learn to Trade 4 Step Trading Plan' - which you will learn further down the article - as well as practice your trading skills and strategies in a risk-free environment.
Once you have set yourself up correctly you can move on to trading courses and trading training as discussed next.
How to Learn Trading
Before we look at how to learn trading with the 'Learn to Trade 4 Step Trading Plan', it may be useful to spend some time detailing the areas within trading, that you actually need to learn. For a beginner trader, it may seem obvious: 'I want to learn everything!'. However, even if that was possible, most people would find that extremely overwhelming. The key is to break it down into small bite-sized trading training chunks.
Here are just a few of the most important elements you need to start thinking about when learning how to trade:
1. Which timeframe will you trade?
Most traders often have busy lives outside of the markets. Whether it is having a full-time job, a business or a family to look after, structuring your trading time is essential when learning how to trade. For example, if you are interested in learning how to trade forex you may be excited by the fact it is open twenty-fours a day, five days a week. It is unlikely you will be available for all of this time to look and trade the market. Therefore, creating a routine can save you a lot of stress in the long run.
Knowing what times you should be looking at the markets and which timeframes you are analysing can help with making trading decisions as it can structure your day. Many beginner traders check charts at random times and flit between different timeframes - just looking for something. If you look at the markets without a specific purpose you will most likely end up making rash decisions or feeling frustrated. In both cases, this can lead to poor decision making and a higher chance of trading losses.
There are three main trading sessions you can plan to trade in:
- The European session (6am - 5pm GMT)
- The US session (1pm - 9pm GMT)
- The Asia session (10pm - 5am GMT)
On your charting platform you have access to nine different chart timeframes:
- Monthly chart
- Weekly chart
- Daily chart
- 4 hour chart
- 1 hour chart
- 30 minute chart
- 15 minute chart
- 5 minute chart
- 1 minute chart
2. Which markets will you focus on?
Once you have established which trading sessions and time frames suit your work and family life, the next step is to identify the best markets for you to trade on during those times. Here are just some of the markets available for you to trade with Admiral Markets via CFDs or exchange traded products:
- Foreign Exchange
- Stock Market Index
- Commodity European Shares
- UK Shares
- US Shares
- Stocks and ETFs
It is difficult to learn to trade on all of these markets at the same time. Create a plan to start learning and trading on just one or two markets first. When you start to feel more confident in what you do, then start to learn how to trade the other markets.
3. What tools will you use in deciding to place a buy or sell trade?
When making trading decisions to buy or sell, most traders use either technical analysis or fundamental analysis and sometimes a combination of both.
Technical analysis is the study of price charts and trading indicators. There are many different chart patterns and trading indicators available to traders. In fact, the Admiral Markets MetaTrader platform has a vast amount of free trading indicators that are designed to help identify trends and turning points in the market.
Fundamental analysis is the study of economic data, or company news to identify trends and turning points. Most people believe a fundamental trader needs to be well educated in economics before they can use it to help with their decision making. However, this is not the case as there are plenty of economic calendars and trading blogs that can help.
4. What risk management techniques will you use to exit your trade at a loss or in profit?
Opening a trading account and placing a buy or sell trade is not difficult. In fact, anyone can do it. However, placing trades that are profitable, time after time, requires some training and skill. Most traders never even think about how they will exit a trade, to minimise losses or maximise gains, but instead choose to trade on 'feeling' and 'emotion'.
Long term, this could be a mistake as anything can happen in the market at any time. Therefore, it is important to use the best tools in the business to help with managing your trades in the best way. For example, Admiral Markets offers advanced volatility protection settings for traders which is, essentially, a sophisticated range of trading orders and settings, which can be beneficial to virtually any strategy to get significant advantages in volatile trading conditions.
5. How can you stay up to date with the latest market news and learn the strategies used by professional traders?
Immersing yourself in the trading world can help to accelerate your trading training. Seeing how professional traders view the markets can give you the confidence to go away, analyse and trade the market yourself.
Admiral Markets offers three trading webinars a week that you can register to watch, completely free:
Monday Webinar: Mastering the 4Ms of Trading
In this series, professional trader and coach Paul Wallace blends market analysis, trading methods, risk management and trading psychology to help you develop your trading skills and confidence. Learn to master the 4Ms of Trading: Markets, Method, Money, Myself.
Wednesday Webinar: Master the Markets
In Master the Markets, professional trader and coach Markus Gabel reviews the most popular instruments on the market and provides concrete trading ideas and strategies you can use to become a successful trader.
Friday Webinar: Admiral Markets' Weekly Market Outlook
In our weekly market outlook, professional trader and market analyst Jens Klatt will provide an outlook for the next week's upcoming economic events and how you can trade them from a fundamental, technical and market-sentiment point of view.
So far, you have learnt about how to access the best trading platforms and products for you to access charts and trade from. You have also learnt a structure on how to start trading from identifying the best timeframe for yourself and the different tools available to you in making trading decisions for both entries and exits.
Now it is time to simplify this into the 'Learn to Trade 4 Step Trading Plan' so you can take action straight away.
Your Learn to Trade 4 Step Trading Plan
Now you are more aware of how to learn trading and the key elements you need to learn and be aware of, here's how you can start in four simple steps:
One of the best ways to learn how to trade is to read as much as trading knowledge as you can - but only from professional traders who are actually doing it. While there is a wealth of information in the Admiral Markets Education section, for those who are interested in trading courses on how to trade forex you may want to take the Forex 101 course.
In this Forex and CFD trading course, you will receive nine online trading lessons (in eighteen different languages) created by experienced, professional traders who are leading industry experts. You will also receive a forex trading certificate on successful completion of the course.
Perhaps the BEST way to learn trading is through seeing how professional traders do it in live market conditions. With three weekly live webinars hosted by professional financial traders it is your opportunity to get the inside scoop on the latest market developments - and how to trade them.
Why not register now for Monday's, Wednesday's or Friday's, free, live trading webinar?
While it is great to learn trading through trading courses, or how to trade forex courses, having the ability to practice what you have learnt is essential. Setting up your free demo trading account is a step in the right direction to sharpen your skills and test your ideas in a live yet risk-free trading environment.
Once you are confident in your trading methods, then it's simple enough to open a live trading account and start reaping the rewards from your hard work and commitment.
It may sound simple but the more you read high-quality trading education articles, the more you watch live, professional traders and the more you practice trading on a demo account or real trading account, the better the habits you will build - giving you a higher chance of long term success.
You don't need to be great to get started, but you need to start to be great. And the best way to start is to register for your next free trading webinar here.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.