By far the best way to learn stock trading is experience. You can be taught all the skills, patterns, indicators, strategies and so on, but you’ll never truly grasp what any of these mean unless you actually experience trading be it using real money or opening a virtual stock trading account.
Over the last couple of years I have been increasingly teaching all types of people stock trading, and I have noticed the difference in thinking between the ones who pick it up quick and the ones that don’t… stock trading is game.
That’s really all there is to it. The ones that get it quick understand that stock trading is a game, and you must be able to read and react on the fly to win the game.
For nearly every trade there will be a winner and loser (see Why You Can’t Beat Wall Street), and, especially in these times, prices move more on superficial thinking rather than actual facts and figures. The ones who can’t figure this out will almost always come out on the bottom.
If you are always looking for textbook moves, then odds are you’ll never see a good trade, rather we must use these textbook strategies and apply them to current and possibly future trends. Regardless of how good a company’s numbers may be, if that related sector isn’t clicking, then it really doesn’t matter what the numbers are because it will all come crashing down.
No longer is the original buy and hold trading strategy so lucrative. More and more traders are looking to get in, get out, and move to the next stock. Different type of trading vehicles like shorting stocks and leveraged ETFs are making it easier to bet on both down and up markets.
So regardless of all the different strategies and techniques you may learn, unless you understand that stock trading is more of a game, you may never see the results you’re looking for.