Can stock trading make you rich?

Who is my competition in trading?

If you want to become a trader, you need to spend a lot of time studying. Many traders are mathematicians, computer scientists, and psychics. They develop trading strategies by working long hours. High-frequency traders use microwave towers to send information about orders to exchange because fiber optic cable is too slow. Some traders use NASA satellite technology to measure how many cars are parked outside retail chain stores because that will correlate to the number of customers and therefore the final price of a stock.

What do I need to be aware of?

If you want to back-test in the foreign exchange market, be prepared to fail. Different vendors will give you different data since they obtain it from their sources. You may need to learn about machine learning optimization to ensure that the data is reliable (ECN-dark pool). Traders operate on dark pools which are private exchanges for trading securities that are not accessible to the investing public. They were created to facilitate block trading by institutional investors who did not wish to impact the markets with their large orders and obtain adverse prices for their trades.

How can I get started?

One way to get started in foreign exchange trading is to learn the algorithmic route. You can learn about all kinds of mathematics, computer science, and psychology. If you want to be successful in trading, you need to understand that you’re competing against teams of traders.

There are several strategies that traders use to beat the market. Some of these strategies involve pure mathematics, mass psychology, convolution neural networks, artificial intelligence, ergodic/entropic risk, risk aversion modeling, game theory, chaos theory, High-Frequency Trading, liquidity provision, liquidity taking, iceberg orders, predatory trading, price impact functions, and instrument correlation arbitrage.

What steps do I need to take to become a serious trader?

Get educated before anything else

Luckily, we live in times of the internet where resources are available to learn the intricacies of forex trading. You can check our Babypips School of Pipsology – a good online course for beginners to learn the basics of forex. It’s free and covers everything you need to know about trading if you are just getting started. 

Forexpeacearmy – is one of the most popular courses on forex trading, which comprehensively explains all the important points. Written by Sive Morten, a forex trader for the last two decades, this course has some exclusive information about forex trading in a newbie-friendly language. Don’t start trading because you saw a YouTube video or read one book it’s important to get a deeper understanding before following further steps.

Demo practicing

It’s also crucial to get a feel for the actual trading platform. Choosing a broker for creating a demo account is a big decision since there are so many options out there. Regulated brokers with low trading costs and plenty of educational resources are your best bet. Fxview. co, fxcmmarkets.com, and avatrade.com meet these criteria. You can try out different ones and then open a demo account for example on MT4. Before you go public you should practice in a simulated trading environment to gain experience and learn how the system works, MT4 is one option.

Live account

After spending some time playing around with the demo, it’s safe to try trading on a live account. However, start with a small amount of capital so that you can learn and adapt as needed. Once you are comfortable and have learned proper risk management techniques, then feel free to trade larger sums without worrying about losses or risking your long-term investments.

Should you start trading? Can it make you rich? Conclusion

All in all, It is possible to make millions of dollars as a trader if you are willing to put in the time and effort. The necessary knowledge can be found on the internet for free, but it will require some time studying before you begin trading with any serious money.

Also, be aware that I will take years if you are new to this sector. If possible I recommend talking and learning from experienced traders who can help you with basic strategies and knowledge.

If you are willing to learn and dedicate time, energy, and desire to succeed, you can find a way to make the big time. The most important step is to educate yourself first, then you can start trading.