When I was first starting out as a trader, I didn’t have a mentor. In retrospect, I wish I had, because I probably would have amassed my fortune far faster.
However, rather than lament that fact, I’d like you to move forward with some of the lessons I didn’t have the benefit of receiving! Here’s a list of 10 things new traders need to know. These tips can and will help fast-track your journey toward success.
1. The easy entry can be deceptive. Becoming a penny stock trader doesn’t require much to get started. Really, all you need is a brokerage account and a laptop. However, this easy entry can be deceptive.
One of the things new traders need to know is that most traders fail. I am not trying to be a downer by saying this; I am simply stating the truth. However, by being aware of this fact, you can begin to avoid failure yourself. The fact that it’s so easy to get started is definitely a plus of trading, but it shouldn’t give you the false sense that it’s going to be easy.
2. The basics are important. I know the feeling: you just want to dive in and get trading. Well, that’s certainly your prerogative, but don’t ignore the basics. It’s important to have a working understanding of trading penny stocks before you actually start moving money around. If you don’t take the time to learn the basics, you’ll basically be gambling. There are plenty of free resources out there, including my free e-guide to penny stocks. I strongly suggest you devote yourself to learning from such guides before you make your first trade.
3. Your earnings may not be reliable at first. This isn’t necessarily a fun piece of information, but it’s one of the things new traders need to know: you’re not going to become rich overnight. No, it doesn’t need to take a lifetime to become a millionaire, but at first, you need to give yourself room to figure things out.
As a new trader, you’ll have some ups and downs. The key is that you have to learn from both the good and the bad. Ultimately, this is what is going to help you build a strong foundation and a distinct trading style. By working out the kinks through trial and error, you’ll become a stronger and more steady trader.
4. You need a mentor. Consider this “things new traders need to know” tip the glue that binds the previous two entries. A mentor is the person who can help you apply the basics and use them to smooth out the rough edges in your trading.
I act as a mentor/teacher to the students in the Tim Sykes Million Challenge Team. In this role, it’s my goal to help guide my students through the basics and beyond, helping them establish a strong base to forge forward on their own unique trading path.
5. Complacency is the devil. When life looks like easy street, it usually means danger is going to come knocking. As a trader, you must always remain on your toes. Just because a method of trading or an investment worked out last time, or even the last three times, you can’t count on it working this time. You always need to do plenty of research and remain nimble as a trader. The market is always changing and adapting, and you must do so in kind. Becoming complacent is a sure fire way to fail in the long term as a trader.
6. The learning never ends. If you think that your education is over once you’ve learned the basics and made a few trades, you’re wrong. For successful traders, the learning never ends. They are constantly absorbing more knowledge, doing more research, and gaining more insight about business, trading, and the world. The best traders are obsessive about amassing knowledge to expand their mental repertoire and to become stronger entrepreneurs.
7. Mistakes are inevitable. This is one of the most important things new traders need to know. Mistakes are not just likely, they are inevitable. This is true for new traders, but it’s also true for seasoned traders, too. There are simply too many variables in trading to get it right all of the time.
So instead of trying to get things right and blaming yourself if you don’t, accept that mistakes are part of the process. You can certainly do all that you can to avoid making mistakes, but don’t think that you have failed as a trader if and when they occur. Learn from them, and vow not to make the same mistake twice.
8. You don’t have to like risk. Risk is inherent to trading. Many new traders try to force themselves to embrace this risk. However, this truly isn’t necessary.
To be a successful trader, you don’t actually ever have to like risk. If you’re risk averse, it doesn’t mean you can’t be successful. More important than liking risk is respecting it. You never have to enjoy risk, but if you respect it enough to do all that you can to mitigate it, you will be well served as a trader.
9. Trading rewards routine. This might sound a little boring, but it’s true: trading rewards routine. If you establish good habits and a strong routine around trading, it will help you in a number of ways.
For one, establishing a routine makes it easier for you to monitor your success on a day to day basis, because there’s more stability to see what is working and what is not. For another, a routine helps you stay motivated and on track. These are just a couple of examples of the many benefits that come from having a routine as a trader.
10. Times will be tough, but they’ll get better. I alluded to this earlier, talking about risk and making mistakes. Ultimately, as a trader, you will experience tough times. I know I did in my early days as a trader! However, it’s important to know that things will get better.
If you’re building a strong foundation as a trader and stay with it, you will begin to find that your wins begin to outweigh your losses. Over time, this is what will make you rich!
If I had known all of these things when I was first starting out as a trader, I probably would have become richer much faster. Happily, you can benefit from my hard-earned lessons and teachings in the Tim Sykes Million Challenge.
What tip was most helpful for you?