Where should beginner start | stockbee

10/24/2014

Where should beginner start

I often get emails from beginners asking where should they start. The markets and choice of setups and trading approaches can be challenging for a beginner. 

In the beginning due to lack of understanding of how markets work and how real traders make money ,  you can end up believing in anything. Which can lead to loss of time , money and opportunity.

First thing a beginner trader should do is to try and master a simple setup. Focusing on only one simple setup will help you gain confidence and help you develop skills faster. 

Trading a setup in existing established trends is one of the good starting point for beginner trader. Once a stock established a trend it offers you a choice of breakout or pullback setups. There are many variation of these setups but they essentially look for either a momentum burst in existing trend after a period of consolidation or buy during low volatility consolidation/pullback in trends. Typically buying first pullback or consolidation after a trend is established is a simple trade setup. That also ensures you are not buying extended setup. 

Simplicity is very important in the beginning phases. That means avoiding piling on too many indicators on your chart or making too many rules for your scans. Simplicity will also allow you to understand each of the indicator you use.

Beginner trader need to put themselves in situation where they have time to consider every detail of the setup they are trading and trade they are making . Simple setup will allow you to plan all elements of the trade. Consistently trading one setup using consistent process for few months will help you perfect it. That is how a small edge becomes unique edge.

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