What is trading?

Computer equipment

No need to spend more than 400 to 500 euros for a computer. During the first two or three years, a simple laptop connected to a second screen (20 inches to be comfortable) will suffice for your needs. Enough to do your market analyzes on one side and place your buy and sell orders on the other. Budget required: between 400 and 500 euros for the laptop (no need to have the latest, trading software works with basic machines) and 200 euros for the screen. Do not listen to specialized sites that tell you that their multiscreen platform at 3000 euros is essential. It’s just marketing!

Initiation

First go through a demo account in order to acquire the automations. Contrary to what some advertisements suggest, you will not become a trader in a week. Mastering the software dedicated to this activity (the two best known are Metatrader 4 and ProRealTime) already requires a month of learning. Then, you have to practice on a demo account for 3 to 6 months in order to acquire the automation: buy or sell? Aim for 5 or 20% gains? The answers will depend on your ability to establish the right scenario. It is therefore necessary to train a lot, to do and redo relentlessly… Most experts consider that it takes a year of initiation before being developed and reaping gains. To save time, training can be useful, such as that of DMTrading, ICT Finance or Patrick Riguet which, for less than 500 euros, will give you lifetime access to their site, to the explanatory videos as well as to their weekly analyzes of markets.

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Starting capital

With less than 1,000 euros bet, your chances of getting out are slim. Many start trading with 200 or 300 euros, hoping to double their capital each year. They will quickly become disillusioned. Not only are the chances of pocketing 100% winnings per year slim (including among the pros), but in the beginning you lose more often than you win. Even by betting only 5 euros per order, the account will be “burned” after six months. It is the law of the genre: the minimum bet to last more than a year is 1000 euros. It will still be necessary to manage your risk: imitate experienced traders, who never place more than 1 to 2% of their capital per order. This will allow you to sustain 50 to 100 losses in a row without emptying your account.

Products for investing

The German Dax and the currencies are the preferred support for traders.

Actions, stock market indices or commodity-based indices (gold, oil, etc.), the choice of media is wide. However, it is advisable to bet on the most volatile, whose prices yo-yo, up or down (you can play both ways). As for stock market indices, the German DAX is thus very attractive (it is often preferred to the CAC 40, which is less reactive).

With equities, it’s more delicate: to aim for quick gains, you have to identify those whose prices have been oscillating without a clear direction for a few days, then wait for a violent bullish or bearish start. Still, the differences are often lower (rarely more than 2% per day).

This is why many traders prefer currencies, where they bet, for example, on the evolution of the euro against the dollar or the Japanese yen: the price shifts are more explosive, but the trends are shorter, which which forces you to watch your position like milk on fire.

Buy and sell signals

It is necessary to know by heart about fifteen graphic figures. Identifying the support that has potential is not enough. It is then necessary to detect the right buy and sell signals. This is where chart analysis comes in. Even if it is not an exact science (false signals are not uncommon), we can see that the curves representing the prices have shapes that recur regularly. By observing them closely, we can thus anticipate their future evolution. When a known figure appears, it is a sign that you can place an order with a fairly high probability of winning. There are about fifteen significant figures (see the examples opposite). To recognize them and know how to interpret them, consult a specialized website, such as Abcbourse.com.

Strategy

Leave your screens and rest during periods of market calm. Focusing on periods when trends are strong, guarantees of capital gains, and abstaining when calm returns (30 to 40% of the time), this is the right strategy. Slowing down is therefore not a sign of weakness, but rather a sign of great wisdom, which makes it possible to avoid trading overdose and the losses that go with it. Be careful, without having your eyes riveted on your graphics all day, you must however stay at least one to two hours in front of your screens, in the morning or in the evening. It’s a discipline to be imposed so as not to let good opportunities slip away.

Risk level

Never commit more than 2% of your capital per transaction. Managing a risk, in trading, is first and foremost about preserving your capital. The only way to achieve this is to limit the exposure of the account: so imitate professional traders, who never risk more than 1-2% of their capital per order, which allows them to withstand 50 to 100 losses. in a row without emptying their account.

Another trick used by many pros, which should also be inspired, is to play over the long term, that is to say with weekly or fortnightly, or even monthly, rather that multiply buy-sell orders during the day. You will be less stressed and have fewer brokerage fees to pay.

To maximize your profits, there is a simple method: pass, after taking a position, two “trigger” orders. One (the “take profit”) to automatically exit the market as soon as the capital gain target is reached. The other (the “stop loss”) to limit the loss in the event of a bad bet. Example for a security bought at 20 euros and a profit target of 5%: you place the take profit at 21 euros and the stop loss at 19.50 euros. If all goes well, you get your 5%; otherwise, your loss is reduced to 2.5%. Many traders make it so that, as in this example, the gain is twice the possible loss. It is then enough to succeed more than one out of three bets to be a winner.

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Broker

Open your account with a reputable intermediary who has been licensed to practice.BoomForex, FeelTrade, Goprobank, Obroker, PromFX… According to the Autorité des marchés financiers, which regularly publishes the list on its website (amf-france.org), more than 120 dubious brokers, in other words without legal approval, are today active today, especially in the currency market. Stop scrapping! We no longer count the number of cheated customers, whose required bet (from 1,000 to 5,000 euros) has never been recovered. Being located in a tax haven, type Bahamas, it is also useless to file a complaint: it will not succeed. To avoid trouble, always opt for a reputable broker, licensed and located in France, such as FXCM, IG Markets, XTB, CMC Markets or JFD Bank.

Scalping, a very high-risk technique

Day trading, where you try to make money within the same day by playing on small price fluctuations, is already a perilous exercise. But there is more daring: “scalping”. Its followers seek to take advantage of micro variations in price, during the space of two or three minutes. They are all aces of graphic analysis. At first glance, the gains recorded are not staggering (often less than 0.10% per transaction), but by playing big and multiplying positions dozens of times a day, some earn fortunes. Others are ruined in a day. To be avoided before having 10 years of trading experience.

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