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Gimmie's Ten Tips for Beginning Traders

1. Educate Yourself

Those who put the work into it, who strive to trade with method and discipline, are the ones who are consistently successful in the long run. It is very important to start with a solid foundation of method before you risk your portfolio.

2. Create realistic goals and a concrete plan of how to achieve them

You are setting yourself up for dissappointment if you jump into trading with no experience or education, and unrealistic expectations. Whether you are trading as a career or a part-time endeavour, it is helpful to see it as a business. That means starting out with a business plan, setting conservative goals, and figuring out exactly what is needed to achieve them.

3. Keep an accurate and thorough journal of your trading

By keeping accurate records of your trading habits, it becomes a wonderful tool for looking back in objective reflection. Looking for common denominators in good and bad trades will help pin-point your strengths and weaknesses, and find which types of trades work best for you. The more thorough the journal is, the better a tool it becomes.

4. Trade on paper only, until your system is 90% correct.

Learn, experiment, and make your initial mistakes on paper only. Make sure your system is accurate, consistent, and can change with the market before you risk your portfolio.

5. Begin trading live with a very small number of shares

One of the biggest problems with trading is that it looks easier than it is. Once your paper-trading is accurate, your education has not ended, but has instead moved on to a more difficult stage, because now is when emotions set in. Take it slowly, cautiously, conservatively and build good habits first with small shares.

6. Arm yourself with adequate trading tools

You can not effectively daytrade without the necessary tools to compete in today's fast markets. This starts with a reliable and fast internet connection, a properly functioning computer system, accurate market data, and a direct access broker. Making commission costs your only criteria for finding a broker may very well cost you much more than you save in the long run. The speed of executions, confirmations, availability and willingness to help when you have questions and problems are of utmost importance and will go a very long way in saving you from losses due to broker errors, delays, and misunderstandings.

7. Safety first, potential second

One key to trading consistently is to pay close attention to total risk. Learn to recognize and avoid high-risk situations, regardless of the potential. Small consistent gains add up to much more in the long run than large high-risk gains accompanied by huge losses. The turtle won the race.

8. Separate method from hope

Base your trading on solid methods and strategies, predictability and patterns, education and research, not on hope or guessing. Trade what you actually see happening, not what you would like to happen, or think should happen.

9. Learn to admit and react quickly when you are wrong

Whether or not you can keep stops will determine your ultimate success or failure at trading. Ninety percent of your losses can come from 5% of your trades. It is very important to be aware of this early and give it your full focus to avoid forming bad habits. Keep your ego in check.

10. If you are losing, do not continue until you know why

If you are losing, things will not get magically better by continuing on the same path. Back up and re-evaluate before proceeding. If you need help, ask! That is what we are there for.