Top 7 Tips to Learn Stock Market Trading

There’s never been a better time to learn about the stock market than NOW.

But how do you get started?

This is the number-one question I hear from would-be stock traders. And it’s a good one.

Learning about trading and the market is actually pretty simple…

You’ve heard that you should ‘buy low, sell high?’ Well, that’s basically how to buy stocks in a nutshell.

But if you try it, you’ll learn that’s easier said than done. There are a ton of factors to consider. If you follow all the advice out there, it can make your head spin!

You’ll soon learn that there are deeper and deeper levels to the stock market.

There are many ways market participants trade and invest in stocks. When you understand the market as an ecosystem, you can start finding your place in it…

This is why I teach. In twice-daily webinars with the SteadyTrade Team, we cover what gives a trade the best chance of success…

I’ll ask you whether you’re trading from your watchlist. I’ll ask you whether a trade fits your strategy.

What I want you to learn is your own trading style. When you’ve got that down, everything else will fall into place. Now, let’s cover some trading basics!

Learn About the Stock Market: How to Start

How to start learning about the stock market is different for everyone…

But the main pieces will be the same. You need to read, watch videos, and learn stock market strategies…

And then you need to get screen time. This isn’t just about trading — although having skin in the game sure adds another layer!

Watching the way stocks move gives you a real-time understanding of the market. It’s easy to look at charts and dream about the ways that you could have doubled your money…

It’s a bit harder when you’re in a trade, balancing risk and your goals.

This is the only way to learn what the stock market is about. It’s not about picking the ‘right stocks’ and predicting their moves.

That’s a fun idea, but it doesn’t exist.

The stock market is a fast-paced game of supply and demand. Becoming a self-sufficient trader will test your emotions and strategy as much as your knowledge.

Fundamentals of Stock Trading for Beginners

The stock market can be a dangerous place for beginners. In some ways, the market is a zero-sum game…

There can only be winners if there are losers too.

There’s no way to guarantee that you’ll come out on top of every trade. The best that you can do as a trader is to make sure your trading plan is solid.

To do this, you’ve got to see what everybody else is seeing. You need a basic grasp of the following…

Technical Analysis

The first thing new traders should become acquainted with is technical analysis. This kind of analysis focuses on price, volume, charts, and technical indicators.

As a day trader, you don’t care too much about the underlying value of the stock … What you want to see is how much you can make by trading it.

Technical analysis includes chart patterns, crucial price points, and popular indicators like VWAP.

Chart patterns follow the same rhythms as the psychology of crowds.

There are cycles to the market. They’re imperfect but there’s a principle at play. Understanding this principle is key to learning how the stock market works.

Crucial price points like 52-week highs tell you that there isn’t a hidden point of resistance. When stocks trade below their recent highs they contain a trap … It’s a pretty safe bet that there will be bag holders waiting to unload their shares when it regains that price.

Technical indicators are valuable for more than just their predictive value. Other traders are also looking at these indicators to tell them when to buy or sell. If enough people believe in an indicator, it can make for a self-fulfilling prophecy.

Fundamental Analysis

You know that GameStop (NYSE: GME) run that started a few months ago? It had its beginnings in a report on the company’s fundamental value.

In November 2020, a WallStreetBets member looked at GameStop’s ownership, e-commerce growth, and debt. He cited these along with GME’s short squeeze potential as reasons the stock was undervalued. This was the first domino to fall in the GameStop story.

It’s sometimes hard to tell where fundamental analysis ends and technical starts. We could look at the GameStop report as fundamental analysis … or just consider its technical, news catalyst qualities.

Traders sometimes ignore fundamental analysis. But it’s still important to know for every stock that isn’t entirely hype.

Learn Stock Market Trading: 7 Tips to Start Today!

Can’t wait to get started? That’s what I like to see!

There are a few considerations to take care of first … and no better time to take care of them than the present.

We’re still in a pretty hot market. But that doesn’t mean that every trader — or even most — will be profitable.

When you’re trading, your top goal should be staying in the game. These tips will help you do that.

Discover Your Trader Type

Socrates said, “Know thyself.” He wasn’t talking about trading, but he could have been.

A good trading plan depends on a lot of things — but the most important is your goals.

If you’re scalping, you’re looking to ride a tiny part of a move. Most scalpers trade at high volume, so small price moves can produce big profits. They’re likely to be heavily technical traders, trying to pinpoint the sweet spot of price swings.

Short-term trading strategies will also be heavy on technical analysis. Fundamental analysis doesn’t matter as much when you’re in and out of a stock in one day.

Day traders might trade momentum moves like breakouts … or they might play chart patterns like dip-and-rips. Their trading style requires them to know more of a stock’s price history.

Swing traders will want to know even more. Has the stock had multi-day runs on news in the past? Has it had a history of toxic dilutions? These questions take on more meaning when you hold a stock overnight.

Long-term traders have to care about a stock’s fundamental value at least a little. All the technical indicators in the world won’t mean a thing if a company goes bankrupt!

Find the Right Broker for You

Is E-Trade better than TD Ameritrade? Well, maybe.

Now they wanna protect their clients….

“Ok boomer” https://t.co/WhbVfgcOBM

— Timothy C. Bohen (@tbohen) January 27, 2021

Then again, E-Trade also halted GME and AMC buys during the big Reddit run of January. But it’s got a pretty good selection of stocks to borrow if you’re short-selling…

It all depends on what you’re looking for!

If you like the OTC stock market, you should avoid Robinhood. The online-only broker doesn’t have access to OTCs…

Not that this stops Robinhood users. Robinhood traders have driven up the price of penny stocks from the NYSE and Nasdaq boards.

A broker like TD Ameritrade might attract you with its trading platform thinkorswim. This leads into our next tip…

Get a Trading Platform that Fits Your Needs

Your trading platform is your equipment. Does your platform produce clean charts? Does it have a good stock screener? Does it have a built-in news scanner?

If you don’t have the same caliber of equipment as the rest of the arena, you’re starting from a disadvantage.

A trading platform is a personal thing. You might have to try a few before you get comfortable…

As this section is dedicated to tips, I’ll tell you my favorite. StocksToTrade is the only platform I trade on.

Why? Well, it answers all of the questions I posed before and then some! It was designed by active traders to fit traders’ needs, which is unlike a lot of other stock software out there.

These are some of its best features:

• A stock screener designed by traders. StocksToTrade has one of the most customizable stock screeners on ANY platform. Add built-in, trader-designed screeners and you’re ready to go.
• A wide-ranging news scanner. News catalysts can come from anywhere — press releases, SEC filings, Twitter. StocksToTrade’s top-line news scanner puts all these news hits in one place.
• Awesome charting capabilities. Most traders base their ideas on chart patterns. To do this well, you’ll need a trading platform with flexibility and precise indicators. StocksToTrade delivers clean and adaptable charts that are accurate to the second.
• A ton of customizable features. Need Level 2 quotes? (You do.) They’re available as an add-on. Want to be plugged into great alerts? We’ve got ‘em.

Grab a 14-day trial today — it’s only $7.

Figure Out Your Trading Strategy

You’ve got to know what you’re looking for before you can trade it.

You already know your trader type … and you probably figured out your goals on that step.

This will help when you’re building a trading plan. So will knowing your risk tolerance.

Risk will play a huge part in knowing what you’re looking for. Are you comfortable trading no-name OTC sub-penny stocks? Or would you rather stick to the established exchanges?

This is also the point where you figure out the finer points of your strategy. Are you a breakout trader or do you look for red-to-green moves?

There’s a lot to figure out in this step. Chances are that you’ll be fine-tuning this your entire trading career.

Build Your Watchlists

Once you know what you’re looking for, you can build your watchlists.

You can make watchlists for general stocks or specific sectors. You can plug in stocks that have been running. You can keep stocks on your watchlists for months or years, trading them along the way.

This step is important. One of the common pitfalls of newer traders is trading random stocks.

This might seem like a good idea when you see the stock pop up on a scan or alert. But it will often lead to bad trades.

When you trade randomly, you’re going in blind. You haven’t taken the time to learn whether it’s a real company or not. You haven’t looked at past charts to see how well it runs on news. You don’t know if there’s resistance or a toxic dilution right around the corner.

Worst of all, you’re showing signs of FOMO. This is the number-one symptom of not keeping your emotions in check.

Just by putting the work into building a watchlist, you’re building your discipline.

There are a lot of good resources out there to learn from. Check out my blog post on building a watchlist…

Then be sure to sign up for my NO-COST weekly watchlist.

You should never copy another trader’s watchlist. But there are valuable things to learn from the way traders build their watchlists.

I break down the thinking behind each of my watchlist ideas. Build enough watchlists and you’ll soon make your own connections effortlessly.

Always Use a Trading Plan

Using a trading plan will help ensure that you’re trading from discipline.

Every day, there are opportunities to get pulled into bad trades. A stock might have doubled since the open, or maybe Elon Musk tweeted something about it…

If you missed it earlier, it’s probably too late to trade it.

Always make sure you’re going into a trade with your eyes open by filling out a trading plan first.

Your trading plan should list the indicators targeted by your strategy. If you’re trading the VWAP-hold, high-of-day pattern, you want there to be a news catalyst and an early spike.

If it’s approaching a 52-week high, that’s even better.

When you join the SteadyTrade Team, you get access to trading plan worksheets. They’re designed to give traders a clear view of a trade’s potential.

Keep a Trading Journal

The only way to know what works is to look at the results.

Now, I don’t mean that a winning trade is a ‘good’ trade and vice-versa … But over the long run, you want to have more winning trades than losing ones.

It’s easy to think you’re better at some trades than others. By keeping a trading journal, you’re getting scientific about the process.

Where to Learn Stock Market Strategy

Setting up is the easy part. Strategy is the part that your trading future depends on.

So pay close attention to the following tips…

Best Stock Market Books

If you’ve been following me for a while, you know that I’m a reader. I always keep a copy of Barron’s around, and I’ve read my favorite books on trading more times than I can count!

I read books on psychology, business, and discipline as well as trading. Even a book like “The Fountainhead” by Ayn Rand can teach you a lot about trading!

But my all-time favorite book on trading has to be “The Daily Trading Coach” by Brett Steenbarger. The content is great, but the best part is how easy it is to read.

It’s got 101 chapters, and each one takes about five minutes to read. You can fly through this book even if you’re not the biggest reader.

All of Brett’s books are great. I’d also recommend “The Psychology of Trading: Tools and Techniques for Minding the Markets” by Brett … “Trading Psychology 2.0” is the updated version.

Once you’ve been trading for a while, you’ll see yourself in the examples Brett outlines. That’s what I felt when I read these.

(As an Amazon Associate, we earn from qualifying purchases.)

Check Out My Pre-Market Prep Sessions

Every trading day, I break down the best things I’m seeing on my pre-market scans.

We talk news, hot stocks, and strategy. I’ll give you a sense of where the market is and share some of my ideas…

You don’t have to trade any of the stocks I talk about. You’re gaining something just by showing up. Even better if you come prepared and ask questions.

Sign up for my NO-COST Pre-Market Prep daily updates here.

StocksToTrade Blog

The StocksToTrade archive is filled with all of the basics. Plus it has breakdowns of the patterns I’ve found work best in this market.

It has day trading strategies and articles on smart trading habits. I give my take on 2021’s hottest sectors and crypto. What more do you want?

If it’s in-depth videos, head to the StocksToTrade YouTube channel.

If it’s podcasts, check out the SteadyTrade podcast.

How to Study Stock Market Strategy Every Day

This is the part that a lot of people miss.

I’ve told you how to study strategy and trade stocks … but how do you get support?

The answer is in a good trading community.

Our SteadyTrade Team meets twice a day to discuss potential trades and trading plans. Twice a day I answer questions and give my perspective on the market…

Add in weekly strategy sessions and one of the best chat rooms out there, and you’ve got your support system ready to go!

Join the SteadyTrade Team here.

Frequently Asked Questions About Learning Stock Market Strategy

For anything we didn’t quite cover yet, here ya go…

What Are the Best Stocks to Buy Right Now?

This question changes by the day. I know. That probably seems like a cop-out, but it’s true … The one piece of advice I can give is to figure out the hot sectors. Stocks in these sectors don’t always need news to attract big volume!

Can You Become Rich by Trading Stocks?

Well yes … but you’re probably going into it wrong if you ask that question. The traders I’ve seen succeed have all put their process before results. When you focus on money, you give a foothold to FOMO and other things that negatively impact trading.

Which Stock Is Best for Beginners?

This is another one that I can’t answer. Sure, I can highlight things you should be looking for like percent gains and unusual volume. But really, the best stock to trade is the one that fits your trading plan and overall strategy.

Learning About the Stock Market: Conclusion

Learning about the stock market is a lifetime pursuit. Hopefully, I’ve given you a decent introduction.

This isn’t a puzzle you can just figure out.

If you want to learn about the stock market, you have to be patient. There’s a lot out there to study, but it won’t make you an expert.

The only thing that can do that is time and experience. Now get to it!

How do you feel about the stock market after reading this article? What doesn’t make sense to you? Let me know in the comments!