Every single person who’s making money in the market was a complete newbie at one point.
They were exactly where you are now.
Heck, I was exactly where you are now.
Looking back to my time as a market newbie, I remember it fondly. But I also remember how frustrating it was to make my first big profit.
That’s why I’ve compiled a few rules—or shortcuts—for you, so you can skip that frustration period and start profiting like the pros…
Shortcut #1: Start with Fake Money
That’s going to sound strange to some of you, but those of you who have paper traded before will know what I’m talking about.
Most brokers will have a Paper Trade option that gives you a fixed amount to “fake” trade with.
You can make real trades on real stocks, but the money isn’t real.
This is exactly how I started, and it’s how I gained the confidence to jump in with cash of my own.
Shortcut #2: Always Have an ‘Out’ (Stop Loss)
This is hard for some to hear, but there will be losers.
There will be times when you lose money on a trade you were certain was gonna go up.
That’s ok. But it’s up to YOU to decide how much you want to lose.
If you put $100 on a trade, what are you comfortable with losing out of that?
I would recommend starting with 5-10%–$5 to $10 in this case.
The higher the number you’re willing to risk here, the more chance you’ve got of the stock turning around and making you a profit.
For example, if you’re only ok with losing $1, there’s a chance your trade is going to close out pretty quickly.
But if you give yourself a $10 wiggle room, the trade may go down $5, then shoot up $25.
Whatever you choose, you must draw your line in the sand and stick to it.
Shortcut #3: Only Trade with Money You Can Afford to Lose
Everybody wants to strike it rich. That leads to delusions that you can afford to wager all of your spare money on one trade because you “know” it’s going to go up.
Nothing in the stock market is guaranteed.
A company can go bankrupt and take all of your spare money with it.
Before setting aside your trading budget, make sure that you can live without that money. Anything you make off it is extra.
When using important funds, desperation will creep in and you’ll start making stupid decisions. And that’s not where you want to be.
So, take these shortcuts with you and leap over the newbies you’re currently on par with.
These are shortcuts the pros use every single day to be as successful as they are.