Tips for New Investors

Tips for New Investors

If you are new to trading & investing with no prior experience you may find it daunting to find profitable investing & trading opportunities. Your biggest challenge is where to start and what to learn. There is also a problem of plenty on INTERNET. The amount of data available is too much & most new investors find it overwhelming as to where to start & what to learn first.

Lets simplify your life with some Tips

Lets start with Dos, Donts & where to start

First & foremost its important to know, what you want out of your investing career & why? I will go in a Q&A flow in order to better explain.
Let me ask you what do you want from your trading & investing career? Why are you here? Whats your prime objective?
You may have different agendas that may include:
  • To create a supplementary side income.
  • To replace your 9-5 job & give yourself a freedom to be your own boss.
  • To make millions of dollars by taking high risk gambling trades.
  • Or may be you are here purely for fun with no agenda
Now what you need to do from this point onwards depends entirely on your objectives. What you need to do to create a side income by trading part time will differ from what you need to do to achieve a full time career replacement vs gambling to make millions.
I believe gamblers who are here to make millions don’t need any tips considering their sole objective is gambling. At best they win, worst case they fold but either ways all they are doing is gambling and that requires very littler formal training. Its all about their gut feeling & bit of a luck, so if you are into that category this article is not for you from here onwards. Similarly if you are here for only fun & time pass, there is nothing much for you either.
Now let’s come back to other two categories. You either want to create a supplementary side income or you want to replace your 9-5 job & adapt trading as your full time career. If you fall into these 2 categories we need the following answers:
What kind of time commitment you are willing to give to learn & trade? Are you a part timer or already a full timer?
If you are a part timer, the learning curve will be different vs a full timer. So lets assume you are a part timer. And you want to create a supplementary side income & if you really make it big than someday you want to replace your current job/business with a full time trading career.
What Next?
Well now we need to choose the asset class that better fits your situation. The choice of asset class depends entirely on your local regulatory environment as well as size of your initial & ultimate investment. Some of the asset classes include:
  • Stocks
  • Commodities & CFDs
  • Forex
  • Cryptocurrencies
  • Derivatives Trading
  • Fixed Income
  • Real Estate
  • Art & Alternative Investments
Your choice of an asset class entirely depends on your Risk : Return profile. The rules of the game are absolutely & entirely different for most asset classes. And therefore each one of them needs an article of its own with regards to Dos, Donts & Where to Start for the New Investors. But for the purpose of our discussion we are assuming you have chosen Cryptocurrency as an asset class to create a side income opportunity that may convert into full fledged career some day.
So what are you supposed to “Do” & Dont as a New Investor who wants to trade cryptocurrency?
Here are some steps that i recommend
Do: Open an Account with a reputed Exchange!!!!! You must stay away from dodgy & shady exchanges with low liquidity. Deposit a small amount. Do not start with big capital yet. Make sure to stay away from exchanges that offer Leverage Trading. If someone is offering you 100x Leverage, they are essentially offering you a gambling opportunity. they will allow you to take a 100,000$ position on a 1000$ deposit. It will take only 1% move in the asset price & your entire capital will be liquidated. So nope, absolutely no for Bitmex at this stage yet. You aren’t ready yet
Dont: I do not recommend paper trading to new investors. Trading is all about psychology & you can never learn the psychology of managing risk with Paper Money vs Real Money.
Do: Figure out the best free charting platforms for Cryptocurrency. Follow the Tutorial for that platform & learn how to open & view charts on that platform. I recommend TradingView.Com for the simplicity. Start with the following topics:
  • How to open & View a Chart
  • How to set a Watchlist
  • How to plot an Indicator on a Chart
  • What is Moving Averages & Exponential Moving Averages
  • What is Fibonacci Retracement & how to use it for trading
  • What is Horizontal & Trend Line Support & Resistance
  • How to trade Support & Resistance Zones
  • How to spot & trade Price Action?
  • What is Trend Trading?
  • Whats is Risk Management?
  • What is Money Management?
Dont: Do not randomly start trading based on some Twitter / Telegram / Discord message randomly. Try to spend some time to learn the basics of trading. You wont be an expert over night but at-least you will learn to know what you are getting into.
Do: Find a Mentor if you can. There are plenty of good traders who offer free telegram & discord groups. Some of them also offer one on one coaching for free including regular webinars. Try to attend them & keep focusing on Support Resistance & Price Action Trading. Thats all you need to learn to begin with.
Dont: Do not complicate your life by trying to learn too many things. Absolutely stay away from Eliott Wave Theory in the initial period of your learning curve. Waht we don’t want is, overtly complicated techniques which will harm your growth.
Do: Now start following good quality people on Social Media & slowly try to decipher their charts & see what they are trying to do. You already have the basic knowledge of the charts. Now try to replicate their strategies and see if you can find some kind of a repetitive pattern in what they are trying to do.
Dont: Dont blindly start taking trades from random Twitter shills yet. Try to learn what they are doing & why, rather than closing your eyes & jumping into the trade. Learning it is more important than earning at this stage.
Do: Keep it absolutely simple, Dont try to over learn.
Dont: Do not try the exotics stuff like mining, master nodes or ICOs yet. You first need to get the hang of this market.
Do: Slowly start taking smaller trades based on the knowledge you gathered so far. Your next step as an advanced trader will be to create a Trading Plan. We will address that separately in my next article. Will also compile a list of free resources to learn the basics.
Dont: Dont be in a rush to leave your full time job / business until you learn the tricks of the trade.
So in nutshell, this is how you can start your trading / investing journey for cryptocurrency. Your buzzwords to learn technical analysis is : How to trade Support & Resistance Zones ? How to spot & trade Price Action ? & What is Trend Trading. You don’t need to bother much about fundamental analysis for cryptocurrency because irrespective of whoever claims whatever there is nothing fundamental about crypto at the moment. It may change in future but for now its all about pump & dump for most part but luckily even they follow Technical Levels which does give you a window of opportunity to learn & master Technical Analysis which can be used across other asset classes too in future.
Last Advise: Stay away from dud coins, dodgy exchanges, shady influencers & negative haters. Try to be in the company of positive people. Try to help others if you can, if not stick to your own business & focus on improving your knowledge. If you like this article, pls do share it with your Friends on facebook & twitter using the following sharing links.
Legal disclaimer: This is not a financial advice. The Trade ideas are provided only for educational purpose.
If you like what we do, don’t forget to like, share & comment to help others. Do follow us on TwitterΒ @tradingroomapp
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Cryptocurrencies: 5,492
Markets: 416
Marketcap: $ 261,068,577,800
24h Vol: $ 63,062,643,370
BTC Dominance: 68.08%