One of the questions I get most after more than 20 years as a professional hedge fund manager is: “What are the most important trading skills for beginners to become successful?”
People have written books about this topic, and all of them kind of say the same thing…
And all of it is true. First, it’s important to find a broker you like that is suited to your trading needs. Second, it’s crucial to search and analyze different types of stocks and figure out which ones you feel comfortable trading — and how much you’re willing to buy.
Then you should learn the steps it takes to buy a stock — what goes into it and understanding the trading lingo — and then start doing it.
But there’s so much more to trading than these rigid step-by-step instructions of what a beginner trader needs to do to trade the “correct” way…
In fact, the skills I’m about to teach you could be the difference between success and failure.
Important Trading Skills for Beginners: The 5 Commandments
The most basic tenets of trading are that a person needs discipline… patience… emotional stability… the ability to work hard… and most importantly, they must be an independent thinker who doesn’t get caught up in the herd mentality.
You have to be able to synthesize news in a way that is unique and doesn’t just follow the mainstream groupthink.
Consider these your five commandments of trading. However, there’s a sixth one that I find investors don’t mention when talking about the most important trading skills for beginners…
And it’s arguably the biggest key factor in a triumphant trading career…
The Most Important Trading Skill
I’ve discovered that knowing thyself is an essential trading skill for beginners, and it can be contingent to success on Wall Street.
Knowing who you are as a trader will make your life so much simpler. But what do I mean by that?
You have to understand if you’re a patient person, or impulsive… whether you like long-term views or prefer getting in and out of trades as fast as possible… or if you like taking deep dives into a topic and want to become an expert on it — which could mean you’re a better investor than a trader, and might need a longer time horizon to trade in.
Discovering these truths about yourself will drastically change how you view the market — and how much success and understanding you have during each trading session.
One of the biggest mistakes I’ve seen beginners make is not understanding who they are, so they try to copy other peoples’ game and strategy.
And the issue with that is the game they’re trying to play may not be suited to their personality.
It’s much easier to tailor a trading strategy that is going to bring out your finest points instead of your weaknesses, and let you play to your strengths.
How do you do this?
I’m glad you asked.
Watch the video below to learn more about the most important trading skills for beginners.
And as always, send any trading questions to firstname.lastname@example.org and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel.
Head Trader, Joy of the Trade
P.S. If you want to learn how I’ve been trading the massive amount of volatility on the stock market in our Round Trip Trading Club strategy, just click here!