There’s no cookie-cutter answer to the question of what trading is good for a beginner. Picking a trading strategy is largely based on the time and effort the trader is willing to invest in learning about financial markets and developing their skills. One also has to account for financial objectives, budget, and expertise. However, trading psychology is just as important, if not as important as knowledge and capability.
Different ways to trade
There are many approaches to investing, and the choice ultimately boils down to individual preference, risk tolerance, and goals.
Let’s start with scalping
A scalper is usually someone described as a short-term trader. The seeks to enter and exit multiple positions within a trading day. They hold onto those positions for a few minutes at most, sometimes even just seconds. They also usually make investing decisions based on technical analysis using different types of indicators or charts. A beginner looking to engage in scalping must exercise discipline as well as monitor their investments continuously to pre-empt any sudden market movements. A scalper is also less inclined to act on feelings or impulsion and is instead driven by data and research. This requires level-headed thinking and robust mental strength.
Also popular is day trading
Similarly to scalping, a day trader will execute a variety of short-term trades but will usually exit them when the trading day comes to an end, avoiding overnight risk. A day investor will also use technical analysis, as well as adopt stringent risk management techniques to safeguard their investments from unanticipated price movements. Like scalping, day trading requires expertise and sufficient knowledge to make informed investing decisions. For someone about to embark on this form of trading, building up a knowledge base and getting sufficient trading practice via a demo account is advisable before jumping in.
Swing trading
For a novice trader not quite ready to take on the challenges that come with executing investments at the click of one’s fingers, swing trading may be a great option. Swing traders usually hold onto positions for a significantly longer period. Whether this is weeks and/or months is based on technical analysis outcomes, and sometimes fundamental analysis too should the need arise. The reason for the latter is due to the impact that economic news and events, geopolitical instability, central bank policies, investor sentiment, etc, may have on the price of assets.
Swing traders are not usually impulsive. They don’t often act on fear or greed.
Position trading strategy
Another investing strategy that may appeal more to a beginner trader is position trading. Like swing trading, a position trader also holds onto positions for longer periods that may even reach years. Taking into account the long-term approach, position investing accounts on fundamental analysis for investing decisions to be made. The investor monitors global events and economic releases and tracks market trends. Additionally, position traders and swing traders likely use an Economic Calendar to track future and current financial activity.
This includes key market-moving economic indicators such as Gross Domestic Product (GDP), Industrial Production Index (IPI) (US), Consumer Price Indices (PMIs), and more. They will follow also dates of key releases or events that might have a substantial impact on the movement of specific asset prices or the market in general.
Improving your trading skills as a beginner investor
Traders at all levels of expertise should engage in some form of ongoing learning. This is particularly important for a beginner investor who is looking to widen their scope of knowledge and improve their capabilities. It becomes even more crucial if the investor wishes to take on scalping or day trading as a strategy. There are many ways to gain a trading education, particularly on the internet which has a wealth of resources for free. Furthermore, a broker like T4Trade also offers multiple avenues for acquiring vital investing skills, expertise, and information.
T4Trade’s Academy in particular provides:
- Webinar for useful trading insights delivered by T4Trade experts.
- Audio siar to improve your investing knowledge.
- Informative videos on demand for investing tips and exclusive market insights for both beginners and experienced traders.
- E-books compiled by an award-winning research team to guide you while investing.
- TV Langsung for daily analysis, trading tips, and live discussions with an expert team of presenters and research analysts.
- An Kalendar Ekonomi for global economic news events & indicators at your fingertips.
For a beginner investing, signing up for a demo account is a brilliant way to gain practical investing experience. To start with, the demo account offers a simulated investing environment that mimics live market conditions. Using virtual funds, an investor can execute investments within this environment, without putting their funds at risk. A demo account offers the trader a way to gain expertise in technical and fundamental analysis.
The trader can learn to read and interpret charts, indicators, patterns, market trends, signals, etc. The demo account also enables a trader to test out various investing strategies, gauge outcomes, identify strengths and weaknesses, and make changes if and when required. Notably, using a demo account also gives an investor, especially a beginner investor, the time to gain the confidence required to minimize the risk of poor trading psychology.
Finally, T4Trade also offers a great selection of blogs that touch on a diverse range of topics, from popular trading terms, trading concepts and strategies, trading fundamentals, and so much more. The broker also has a useful Soalan Lazim page that answers many of the questions traders seek answers to as they’re about to embark on trading.
Pengurusan risiko
Regardless of the investing strategy a beginner trader chooses to adopt, having an effective risk management plan in place is crucial. As a novice trader, the risk of having one’s emotions impact trades is high. Be this feeling of fear, stress, greed, or frustration, each one of these emotions may adversely impact trading outcomes so employing risk management techniques to mitigate their impact and protect your capital is super important. Using stop-loss and take-profit orders are some of the most popular techniques an investor will use to safeguard their money.
Picking a broker
Picking a broker that will assist you in a way that increases the likelihood of investing success is vital. There are various ways to choose a broker, as follows:
- Ensure the broker offers a selection of accounts that align with your objectives, budget, and tolerance for risk. A broker like T4Trade offers Standard, Premium, Privilege, and Cent accounts through which an investor can access CFDs on a variety of underlying assets. This includes forex, metals, indices, commodities, futures, and stocks. Whether you are a beginner trader or someone more experienced, there is likely to be an account suited to your needs.
- Discover what trading platform the broker offers. T4Trade for instance provides access to one of the world’s most popular platforms, MetaTrader 4 (MT4). MT4 has earned worldwide acclaim as it provides almost everything a trader needs to trade. It provides almost all the features and functionalities required, with a user-friendliness that appeals to traders of all levels.
- Research the broker in terms of competitiveness. Do they offer tight spreads, attractive pricing, easy and quick withdrawal and/or deposit of funds, flexible leverage, etc? These are key decision-making factors before picking a broker.
- Test the forex broker’s customer support. Establish how quick they are to respond to queries, regardless of the communication channel. Is the team multilingual and do they appear to have the expertise necessary to assist you with your queries?
Trading with T4Trade
T4Trade is a popular CFD broker that appeals to traders internationally. It offers a convenient, flexible investing experience with the opportunity to engage in continuous learning via a massive range of educational material. T4Trade’s MT4 platform also provides traders with all the necessary tools to engage in trading quickly and easily.
Penafian: This material is for general informational and educational purposes only and should not be considered investment advice or an investment recommendation. T4Trade is not responsible for any data provided by third parties referenced or hyperlinked in this communication.
