It is always probable for a beginner to commit mistakes, and even more so in money markets. Never start live trading at the first chance; rather open a practice account first, and pretend you’re trading with real money. Do not take on big risks with trades just to make huge profits, or you might sustain losses. Prove to yourself that you are good at trading, and then try becoming a successful trader. Trading on a practice account should be done for at least 3 months and then you can switch to live trading.
It is essential, and good, to review your trades and calculate the losses or profits on them. Find time to review the outcomes and possibly think of new ideas and strategies. This could help you to devise better moves in the trading market. Always make improvements to your trades, and spend a little time and effort if that will count in the future.
For traders and investors there are many strategies or money management systems to draw among. Just never test one for your practice account, and then another for your live trading. That way lies chaos. Get a subscription to Money Management Executive and learn safe methods to use with your practice account. Watch and learn from the outcomes. Even with all this, one trade could drastically change your fortunes, so be careful.
Make small investments in the beginning. At least $50000 should be invested. Try to work out a strategy while considering an account that is 10 times the size you’re now using. You will understand any trade better with the magnitude of the volumes projected.
To cite an example, take a short selling strategy at $40 for a stock. You could keep your position open until you can take a risk and decide it to be $43. The risk for every single stock comes to $43 minus $40 = $3. When your purchase is for 100 shares, your risk could be $300. Take the account value and calculate the risk. A beginner should limit his risk to 2%, which in this case is $50000x.02=$1000.00. You can sustain this risk. The purchase number of shares limiting your risk to $1000 or less, would be 333. Always round down.
If you’re only just starting out, make sure you stay safe, and for the best strategies refer to Money Management Executive and other similar magazines.