When folks first start their trading journey, they’re typically super enthusiastic.
They’ll watch a few beginner strategy videos and think the whole thing is a piece of cake!
Nothing could be further from the truth though…
Getting consistent and repeatable results requires lots of time and dedication.
Yet, many new traders will jump into the deep end and inevitably drown!
Bring an inflatable device so that you can learn the ropes in a safe environment.
How does that apply to trading you ask…
There actually is an “inflatable device” in the stock market known as paper trading.
Most brokers have a feature that allows folks to simulate real-world trades without actually having to put real capital on the line!
While paper trading is not a one-to-one simulation, it can introduce newbies to some very important concepts early on…
One of the most important of which is that trading is a probabilities game.
Folks often fall into the pitfall of believing that one or two trades define their overall trading success.
As a result, they become fearful of risking any more capital or worse…
They become so overconfident that they put their entire portfolios on the line!
With simulated trading, you get to see this dynamic play out firsthand without the damage of real-world money at play.
Eventually, it will make sense to transition away from paper trading…
The psychological dynamic between risk-free trading and having real money on the line is very different, so the transition should be done slowly.
It makes sense to manage a small account first, and slowly build things up as one one gets more comfortable.
This will be different for everyone depending on their financial situation.
For some folks, $50 may seem like nothing…..for others that number may be closer to $5000!
Whatever it is, the important thing is to start feeling the emotional weight of real capital without getting completely overwhelmed…
That’s all for today.
See you soon,