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Top 7 Steps To Learn Successful Trading

Millions of newbies take the plunge into the market every year, but most of them stray a bit from the poorer and wiser, where they have never reached their full potential.

The majority of those who fail have one thing in common: They haven't mastered the basic skills needed to turn the odds in their favor. However, if one takes enough time to learn it, they can be on the way to increasing their odds of success.

learn to trade

1. What is the concept of trading?

  • Most of us trade regularly in our daily lives, even if we aren't conscious of it. For example, everything we buy from stores is a form of money trading in exchange for the items or services we buy, and therefore the concept of trade may be reduced to the definition of an exchange of one thing for another. When we think of trading, we usually think of an act in which a good or something is exchanged for money, or in other words, when we buy something from one person and sell it to another.

  • Trading is primarily based on supply and demand in general, as the value of the thing that a person or group of people wants to buy changes as supply and demand fluctuate, and high demand for a commodity or financial asset indicates that there are a large number of people willing to pay the price to obtain it, thereby increasing demand. The requirement for a big quantity of a commodity will result in an increase in its price or pricing.

  • On the other hand, the high supply of a commodity, which means that there are no purchase orders for it, or that the quantity supplied of it is higher than the volume of demand for it, may lead to a decrease in its price to attract customers to buy it.

We review together the following example to understand the topic more clearly

  • We'll say you're in the vehicle market - that is, trading cars for money - and you want to buy a specific model that can only be found in one store with just one car of that model. If you're the only buyer in the store, you'll most likely be able to get it. It is at an acceptable price, but if numerous purchasers want the same model, this implies that they are competing for it. In this scenario, the merchant is expected to raise the price because there are so many people willing to pay for it, simply expressing the first principle. In the trade idea, which is "high demand - the desire to obtain - leads to an increase in prices".

  • If, on the other hand, the store has ten automobiles of the model you want to buy, but only two buyers, it is likely that the store will lower the price of the car to attract more consumers, and this move is a validation of the second premise. "An increase in supply - or the supply of a commodity - leads to a reduction in pricing," according to trading.

  • Therefore, the above can be summarized by indicating that the trading process works by exchanging one thing for another of equal value, and this value is determined depending on the strength of supply and demand for this thing, and the trading process has developed over the ages, and to obtain the same The consideration was different in each period, from bartering for another commodity to exchange it for gold or other metals, and finally exchanging commodities for money in its various forms (cash, credit, electronic, or digital).

2. Skills required before learning to trade

After learning about the concept of trading and what it is, it is important to understand that trading is not limited to daily transactions and exchanges, nor is it limited to commercial transactions. With the emergence of various financial markets, trading has evolved into a profession, with concepts ranging from speculation to investment, and for an individual to possess the characteristics of a trader and be successful in it. To possess a number of essential attributes that set a successful trader apart from others.

It's important to remember that trading success is the result of a lot of hard work, trial and error, and constant progress, possibly over several days.

Below we review the most important features of the trader:

1-The ability to continuously learn and experiment

You must be motivated to turn to learn trading and its basics into something fun. Trading is like any other profession or craft that you must learn and not only peel things, but have a full understanding and knowledge of the details, the markets are by their nature dynamic, constantly changing, and affected by many external factors and news, Every day there is something new, and your learning process must be interesting to make full use of what you have learned.

Most traders succeed when they learn from their past mistakes and do not repeat them, as the only way things will get to the end is to learn from past mistakes and avoid them.

Remember that you will never be able to outsmart the market, and you will never be able to exact vengeance on it for its obstinacy. Some traders have had great success, which has prompted them to be overconfident to the point of vanity, which has led them to take a bigger risk, which has resulted in a higher loss. When you lose money in the market, do not try to avenge yourself. Allow yourself to grasp the reason for the loss, in order to prevent it in the future trade and therefore achieve success.

2-Risk management before taking profits:

Accepting risk and understanding its causes is one of the most important factors in success in managing your trades or trades, but most novice and inexperienced traders focus only on profits based on the idea that trading is only a way to make quick profits without managing risk, and this exposes them to losses in a big way, forgetting the monthly rule based on "as much risk comes profits," which do not apply to them.

3-Discipline and patience

Patience and dreaming are among the qualities that a successful trader always possesses, and this is what makes him make correct investment decisions that are not rash.

There is no consistently profitable strategy or approach; the key to trading success is discipline, regardless of how it is invested, discipline in preparing and implementing the trading plan as required, and discipline in trading according to what achieves your goals from the trading process that leads to profit.

4-Objectivity in dealing with the market

One of the characteristics of a successful trader is a realistic and objective assessment of the market, based on which he can set correct expectations that are closer to reality, in addition to knowing all the information needed to form a clearer picture of what you are thinking of trading in, and the trader must be organized and decisive in their decisions, which helps to organize your investments and know the success rate of each transaction. It can also track the overall capital failure and success rates.

3. About trading in the financial markets

We trade in diverse commodities markets in our daily lives, and we can trade in different financial markets using the same approach. But before we go into the theory of trading in financial markets, let us first define financial markets. Below:

Capital markets, including the stock market and the bond market: When we apply the principle of trading in the stock market as an example, trading will be the purchase of a share - or a small part of a company for a certain amount of money, and if the value of those shares increases, money is earned by selling them again at a price higher.

In simple terms, this involves buying something at one price and selling it at a higher price in the hopes of making a profit.

3. The forex market, often known as the foreign exchange market:

The concept of trading, or exchanging one thing for another, is used in the foreign exchange market, where one currency is traded for another and the trader can benefit by reselling it at a higher price if the price of the currency being bought rises, and vice versa. We use the same trading premise here: we buy a currency at one price and then sell it at a different price in the hopes that the price will climb.

Because of the mechanism of action in the currency market, the trading system or what is known as the pairs system is somewhat similar to the barter system - as we discussed in detail in the topics, what is a forex, and the pairs system in the currency market - trading in the currency market differs from the rest of the financial markets.

Commodities market: Commodities are traded in the form of spot, forward, contracts in the commodities market, which includes important commodities such as wheat, sugar, cocoa, gold, and oil. When purchasing or selling a commodity contract, the principle of trading is employed. Trading by speculating on commodity prices using CFDs is the process of hoping that their price will fall in the future.

The principle of trading in the cryptocurrency market: like the foreign exchange market or the commodity market, is to buy a specific digital currency for a specific amount of money, and if the price of the digital or cryptocurrency is purchased increases, the trader can profit by reselling it at a higher price, and vice versa.

Before selecting to trade in various financial markets, a trader must understand the fundamentals of trading in general, as well as what each market is and how to deal with it, in order to design successful methods that make trading in these markets easier. As a trader, for example, there are crucial themes that you must understand before joining the foreign exchange market. The same logic applies to entering the stock market, commodities, digital currencies, or other financial derivative markets.

  1. Before entering the forex market, there are key topics that you should know as a trader
  2. What are financial markets?
  3. What is forex? Currency trading basics.
  4. Trading in the FX or currency market has a number of advantages.
  5. Currency pairs traded in forex.

4. What is the difference between trading and investing?

Although both the investor and the trader aim to make money by trading in different financial markets, there is a distinction. In the financial markets, there are two paths to take: investment and trading.

The difference between the two can be summarized in that investing is the use of an amount of money to get a return from it for long periods, while trading generally aims to buy at a lower price and sell at a higher price to make profits in short periods. While the investor seeks to achieve greater returns by buying and keeping stocks and bonds for a long period, in addition to the possibility of achieving a return without the need to sell the stock or the bond, from dividends, for example, in stocks or interest on bonds, and on the other hand, the trader benefits from the rise and fall of the markets by buying and Selling for a shorter period and making smaller but more frequent profits.

Trading and investing can be differentiated by 5 factors:

  1. Time Range: Unlike a trader who is mostly interested in short-term and repeating earnings, investors invest their money for comparatively long periods of time. Short-term market price fluctuations or movements are less important for a long-term investment.
  2. The way of profiting: the trader examines the upward and downward movement of stock prices in the market, and the trader can profit from the rise or fall in the prices of stocks or other assets. While the investor seeks a long-term return by multiplying interest and profits by holding high-quality stocks and assets in the market for several years.
  3. Risk ratio: Both trading and investing expose capital to risk, but trading has a higher risk ratio in exchange for larger profits due to daily market swings and price drops and rises over short periods of time. While investing takes longer to develop than trading and has lower immediate risks and returns, it can offer better returns over time by accumulating interest and profits because it is not affected by daily market swings.
  4. The minimum allocated capital: or the so-called initial balance to open the account, which is usually the money allocated for investment is greater than the allocated for trading, so we may see that stock brokerages may require accounts starting from 5000 dollars to start trading or investing in stocks, in When forex brokerage firms require a minimum account opening of $200 only.
  5. The amount of time devoted to the trading or investment process: This refers to the time stores spend following up, assessing, and selecting transactions. Trading, unlike investing, necessitates more follow-up time, albeit not for extended periods of time, but it is frequent despite its briefness owing to daily follow-up, which may occur multiple times throughout the day. It requires at least two hours per day from the trader's time. Long-term investing requires less time, which may be limited to a few hours per week or month for searching for investments and selecting acceptable possibilities that match to the specified strategy, followed by a few minutes of follow-up.

5.With electronic trading, you may learn to trade more quickly.

The emergence and spread of trading systems financial assets through various means of communication is credited with the spread of the idea of electronic trading. With the presence of high-performance computers and smartphones, online trading has increased significantly, especially as the global economy becomes increasingly dependent on financial assets such as stocks and others.

Electronic trading is not different from the exchange of anything else in our daily lives except that it is done via the Internet and is subject to the laws of traditional trading led by the law of supply and demand. Electronic trading is the exchange of financial assets through trading platforms or programs such as buying and selling currency pairs, stocks, commodities, and digital currencies through trading platforms offered by brokerage companies to profit from changes in the prices of these assets in the expected direction.

One of the most important advantages of electronic trading is the opportunity for many trading brokers who offer online trading platforms to enable a larger number of investors or traders to follow up, conduct and execute transactions on their own, compared to traditional trading which required presence in the market headquarters, and the most famous examples of these platforms It is the MetaTrader 4 platform that is used for trading currency pairs, and it is also possible to trade stocks and indices, as well as commodities and cryptocurrencies.

6. Tips before entering the world of trading

It must be taken into account that day trading is not as easy or convenient as it seems at first glance and is also not considered a quick earning method as some think, and despite the challenges that traders face daily, some people take day trading as a part-time and sometimes full-time job, so it is necessary to follow the following tips to achieve the desired profits from spending time in day trading:

Learning the basics of trading: 

science and knowledge is the weapon of the trader, and before entering the world of trading, the individual needs to understand the nature of the market that enlightens dealing with it first, and to know the sources of its news and data, how to deal with them and how to benefit from them, then turns to learn the basics of trading, its mechanism of work and the method of implementation in The different financial markets, then experience, which is one of the most important elements that will determine the extent of his understanding of what he has learned and his ability to enter the field of trading correctly.

  • First, identify risks and challenges: trading, speculation, or investment involves risk, and making profits from trading is based on the ability of the trader to identify and deal with risk, and manage his capital properly, so accepting the idea of risk and discussing ways to deal with it is the first path to success in the markets

  • Second: Trading depends largely on the psychology of the trader himself, you trade what you see and what you understand and what is commensurate with your nature and vision, constantly develop your style, and trade the financial instrument that you can understand its movements, follow its news and bear the risk of trading on it, Remember that you will not be able to trade alone. Consult, follow and discuss the analyzes of others, and learn about different sources to make your vision more general and comprehensive, but share your point of view, and trade what you see and what you understand.

  • Third: Trading with the funds that are more than your needs: It takes some time to be able to achieve a kind of stable return from the trading process, so starting the trading process with a large amount deducted from your expenses or from your basic expenses is a great risk, as this constitutes a great psychological burden on you during The trading process, which may affect your decisions, and you should know that one of the foundations of risk management associated with day trading is the use of money that you do not feel sad to lose, and this is the concept of accepting risk, so we always advise to start trading with small amounts as an initial experience to deal with the markets

  • Fourth: Develop a plan and strategy for trading and capital management: To develop a successful trading plan and strategy in the currency market, it must be appropriate to the nature of the trader’s personality and his goals for entering the market, and the plan must be clear, realistic and executable by the trader himself. Remember that trading is a business, preparing a plan or preparing a trading strategy is a feasibility study for this business

7. Frequently Asked Questions:

  • What is trading?

The trading process works by exchanging an asset for another of equal value, and this value is determined depending on the strength of supply and demand for this asset. Usually, the term trading means buying an asset at a low price and then selling it at a high price to achieve profits.

  • How do I start learning to trade?

You can start learning trading through the lessons available in the Arab Trader, browse the forex school and learn technical analysis lessons

  • How do I start trading?

Individuals can start trading in the various financial markets through licensed brokerage companies, where the trader opens a trading account for him in the brokerage company, and the broker will provide him with the necessary facilities and information to enable him to start the trading process.

  • What is electronic trading?

Electronic trading is the exchange of financial assets through various means of communication through the so-called trading platforms or programs where you can carry out buying and selling transactions of currency pairs, stocks, commodities, and digital currencies through them to profit from the movement of the prices of these assets

  • How do I make profits in the world of trading?

Success in trading is not by chance, but behind it, a lot of effort and fatigue over long days, and the successful trader has several qualities that pave his way to great profit and wide fame, and to start making profits, you must learn the basics of trading, understand the risks and challenges of trading, and then research in Market, potential strategies and platforms, start trading with unnecessary small amounts, then develop a plan and strategy for managing money to make more profits than losses.

To get started in forex trading, visit our article What is Forex? . For more advanced traders, visit our article on the most important Forex market hours.


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