When you're just starting out trading, there are a lot of things to consider. While trading is not the easiest thing to start up with, it's also not the most difficult. Either way, knowing what you're getting into and how to deal with everything that will come up in trading is important. Apiary Fund goes over the basics of trading throughout the Beeline to Funding program, as well in a lot of the additional classes that are taught. Here are some prime examples of information traders should look into and learn as they start out trading.
One of the most important things to know when starting to trade is how you’re going to do it. Developing a strategy is paramount in trading. Just because your friend gave you their “awesome strategy” doesn’t mean you should just run with it. Strategies vary from person to person in how effective they are and what works great for your friend may only work okay for you. Having something to start out with is great, but improvements can always be made.
Even the most skilled traders out their change how they implement their own strategy and what they do in the market, so some strategy you just came across could always use improvement. This is one of the reasons you see Apiary Fund teaching multiple strategies, so traders can find what works for them. There isn’t an all-powerful strategy that makes every trade a winner for anyone.
Second, and in close connection to strategy, a trader must understand risk management. Risk management will present itself in many forms as one starts trading. Everything from your entries to your exits to your lot size will depend on risk management. You have to know what you have and what you can use when you are trading. Learning proper risk management comes in the form of well-placed stop losses and take profits along with proper places to enter the trade.
Once you’re in the groove of your setup and you have proper risk management on your side, you can branch out a bit more. One thing that can make trading easier is pending orders. It's important for traders to know of the pending orders along with what they are: stops and limits. Stop orders are pending trades that trigger when the market hits them and become profitable when the market continues to move in the same direction as when it was hit. So, your buy stops are above market price and your sell stops are below market price. Limits are similar but the opposite. These are ares where reversals are expected. Buy limits are below the market and sell limits are above the market. Once these stop or limit orders trigger, you can make profits without having to be at the computer. You can also lose with these, so make sure appropriate risk management is in place.
Now that trades have been placed and both profits and losses have been seen, you’ve probably seen that emotions can come out in trading. As with anything where money can be made or loss, emotions are a big part in trading. There’s a reason that casinos offer free drinks and make it as hard as possible for you to know what time it is, anything that can change your emotions can change your judgement and can change your ability to make rational decisions. Knowing how your emotions effect your trading is a critical component to what happens on the platform and needs to be considered. This is why the Apiary Fund has the investor profile quiz, to try and show you your trading emotions.
Finally, as with most everything, know what you’re paying for. When you're trading, there are spreads, there are commissions, and there are swaps. You should know which of these is costing you how much. This is one of the things that was discussed in the Questions to Ask a Broker article. Trading is a great way to generate income, but make sure you know exactly how much income you’ll be able to make with your strategy with what you may have to be paying per trade.
It’s important to know what you’re getting into, especially when it concerns your money. Knowing certain basic ideas when you are trading can reduce the surprises you will encounter in the future of your trading and hopefully result in more profits sooner. Whether you are with Apiary Fund, or some other trading company, make sure you know the basics before or just after starting. It’s always good to look into whatever education who you are trading with offers before you go full blast because those can change the basics as you know them.