Deciding to put your hard-earned money at risk in the securities can be scary, and the move comes with plenty of responsibilities. In addition to locating a competent broker and funding an account, there's a good amount of self-education to undertake. Even if you have a formal college or graduate degree in business, finance, or accounting, theeveryday world of buying and selling securities can be intimidating.

What's the solution? Step one is to sit down and write a plan for educating yourself. List the areas where you know you need help, do some research to locate reliable resources like books, tutorials, courses, and webinars for those new to trading. Step two involves studying several specific topics like how to analyze rather than gamble, how to set realistic profit targets, how to come up with trading rules, how to acquire order-placing skills on a simulator, and more. Where to begin? Find out why it's imperative to make rational decisions rather than guesses.

Analysis vs. Gambling

When you study how to use analysis-based decision making, you will be able to buy securities based on objective facts and real information. If you don't learn about analysis, you'll likely end up doing nothing more than gambling your money away. Learn about technical and fundamental analysis, moving averages, technical indicators, and other tested, commonsense techniques for evaluating a corporation's securities. It's easy to guess, but it's far more profitable to analyze, study, and investigate each stock you plan to buy.

GoalSetting

It's true for every profit-making endeavor that without a clearlydefined set of goals, people soon find themselveslost. This concept is especially true where markets are concerned. For example, anyone who creates a set of day trading strategies does not do so in a vacuum. A fine-tuned group of rules like that can't even be crafted unless the person knows what the final goal is. Who heads into a job interview with absolutely no idea of the salary they want? In many ways, goals define the approach, so be sure to list your monetary targets, both long-term and short-term for your new avocation.

Practicing on a Simulator

Trading simulators are an excellent way to learn the rudiments of how to place orders, how to manage money, and how to prevent losing large sumsas you go about your profit-seeking activity. There are dozens of different kinds of simulators, so it's difficult to describe exactly how each one works. The good part is that they come with detailed instructions. Plus, it doesn't matter if you make lots of mistakes because you're not using real money.

The only downside is that because the funds are not real, it's not easy to get a feel for what's it's like to have your own, real money on the line. But the massive upside of simulators is that you can learn how to place orders correctly, how to get out of trades when things go south, and how to manage several positions at the same time. Ideally, you would spend at least two weeks on a simulator, doing nothing but attempting to grow your account (which usually consists of $50,000 in fake money to begin) by making profitable trades.

Following a Rule-Based Strategy

After a few weeks of buying and selling, you'll almost instinctively come up with a few rules you prefer to follow. Write them down, continue to refine them, and then use them to guide your daily activity. The beauty of rules is that they remove emotion and impulse. For instance, if you have a rule that says to always close a position if it declines 20 percent from its initial value, you wouldn't hold on to a share that you bought for $60 when it sinks to $47. You'd sell at $48. There's no room for emotion when you follow the rules. Many platforms have helpful apps that let you define a set of rules, test them out, and then set your account to automatic function.

The Importance of Current Events

Whether you are a short-term or long-term type, stay abreast of current events. Watch at least one weekly financial program that discusses the areas of the market where you tend to park your money. Several of the weekend TV programs are an hour long and cover all the major world and national markets, sectors, and key events. There's no need to become a news hound. That's not what a trading self-education is about. What it is about is knowing the relevant events in politics, economics, science, and business that affect your portfolio's value.