How to Start Trading Stocks and Futures to Make More Money

How to Start Trading in Stocks and Futures


Making consistent income from trading is hard.   I know because I tried.  I’m a perpetual learner, yearning to find new ways to add more income and an experimenter.  Trading has challenged me at all different levels, financially and psychologically.

My journey in trading started in 2001, just after the tech bubble.  I started with 1000 dollars and months later, reached my financial goal and exited out of all my positions.  I researched, made a plan, bought shares and traded with simulation money before attempting with live money, and then rinsed and repeated.  The result over the years was decent.

A year ago, I tried a different strategy (day trading) and failed miserably.  Any money I gained, I quickly lost as I struggled to grow my equity.  I became too emotional with my money and my account reflected this fear.  I read a lot about trading to psychologically prepare me for day trading, and it turns out that I was experiencing the same emotions and struggles that many other traders experience.

The North American Securities Administrators Association published a study concluding that the majority of traders lost money and a vast majority of traders ran the risk of losing their entire stakes.  The most frequently cited is a study by Ronald L. Johnson ‘ An Analysis of Public Day Trading at a Retail Day Trading Firm – Report of the Day Trading Project Group Findings and Recommendations’

Putting this in perspective, Yes, most day traders fail — about 80 percent in the first year. But so do a large percentage of people who start new businesses or enter other occupations.


Field

First Year Failure Rate (%)

Real estate sales

86

Day trading

80

Training for a marathon

70

College

33

Restaurants

26

Teaching

13

source:http://www.dummies.com/how-to/content/day-trading-success-rates.html

After experiencing this failure, I decided to get educated.  I found a mentor and soon after I became a much better trader.  To become a proficient trader requires a significant amount of practice, discipline and dedicated training.   It involves tears, hundreds of hours of hard work, and ongoing training.

If you have ever contemplated trading as a side hustle, it is difficult but not impossible.  If you have money you can afford to lose (ideally a small percentage of your net worth), discipline, interest in the markets, and training, it is possible to be successful.   Here are ten things you need to know based on successes and failures as a trader.

1) Never trade money you can’t afford to lose.  If this money i