Steve Burns - So You Want to be a Trader: How to Trade the Stock Market for the First Time from the Archives of New Trader University

So You Want to be aTrader

Trading is not just math.Its not just a system that you plug into a chart, and its not a path to easymoney. You are going to have to earn it. If you do get lucky and make somequick money, you will eventually give it back. Trading is a business that must berun in a professionally at all times. Trading is challenging because itrequires being good at many things. Why? Trading is a multidimensional sport.

Here are the foundationsrequired for being successful:

1. Work Ethic: You have to do a lot of backtesting,researching, and the study of price action. Hundreds of hours of work arerequired. You must have passion that can sustain you during the latenights of study.

2. Support from your spouse or partner: If yourwife or husband doesnt believe in you and what you are doing, it will proveproblematic at some point. Understand their viewpoint, and ease theirfears by being transparent about your activities. Trade responsibly and dont doanything stupid, like trying to trade when you are under-capitalized or withouta proven system.

3. Capital: Without enough capital you will beineffective and unable to trade effectively. Commissions and slippage will be ahigh percentage of your capital. If you have only a few thousand dollars totrade, you would do better off with long-term trend trades and hold investmentswhile you grow your capital.

4. Mind set: You have to embrace the risk andreward of trading real capital. You must battle the unknown, not allowing it tostress you out, or give in to bailing when the uncertainty of short-termresults come calling. A trader must think like an entrepreneur and not anemployee.

5. No Gambling : You should remove any gamblinginstinct. Be like a casino, measuring probabilities, odds, and possibilities ofwinning, rather than hoping, praying, and dreaming of a huge win.

6. Timetable : You have to change your timetablefrom get rich quick to steady returns and consistent growth of capital. Thereal path to big money is in the magic of compounding returns over multipleyears.

7. Manage Risk: Good tradersrisk a little to make a lot. If you risk a lot in the hopes of making afortune, the odds are that you will lose over the long term.

8. Self Control: A trader must be in controlof their fear, greed, and ego at all times. These will all exist, but how theyare managed will be the difference between success and failure.

9. Just Another Trade: Tradersmust trade at a position size that makes each individual trade just one of thenext one hundred. No trade should keep you from following a trading plan.

10. Long Term Results: Tradersmust understand short-term results can be random. It is the faith in long-termresults, while following a robust methodology, that makes all the difference. A traders edge will play out and lead to profitability.

Thebook I wish I had when I started > NewTrader 101

Starting a TradingBusiness

If a new traderwants to be a successful, they will need to treat their trading like they wouldoperate a profitable business. Many traders lose a lot of money by approachingtrading like its a hobby. In trading, making money is the goal, and must bekept at the forefront of a traders mind if they are to be successful. Fun andexcitement in trading can be expensive entertainment. The reality is that mostof the time, trading is boring. A trader must treat the market like they wouldany other business by utilizing discipline and great care to grow their capitaland be successful.

1. You cant open your trading business until you have a fullbusiness plan.

2. Your inventory is your current positions; you have to buy themfor less than you intend to sell them.