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Wednesday, June 11, 2014

Educating and empowering professional traders

Stock trading tips
Virtual trading simulations help develop trading accuity
By  Plator. L. Makreisat

Warren Buffet, the American business mogul, who is today recognized as the most successful investor of the 20th century, follows two rules firmly in his life. “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” he states. Those who have traded in the stock market, however, will vouch for the fact, that unless you are a genius like Buffet; even with the necessary learning and skills, you can bleed financially here. Without them, you may probably even become bankrupt! Which is why, having some prior education in trading is always considered to be an advantage, for those who want to learn how to trade professionally.

Paper trading provides you with "real life learning" without the risks

Most professional traders start off their careers, by first trying their hands at ‘paper trading,’ before venturing into the highly volatile arena of the stock market, with real money. Paper trading in simple terms, is the practice of trading hypothetically in the stock market. Here, while you are trading in real stocks in the market, whatever you buy or sell is done theoretically and without any real money being involved. Your transactions are simply recorded on paper, so that after you have finished trading, you can assess how much profit or loss you would have made, had you traded with real money.

Paper trading’ helps you ascertain whether you are cut out for the stock market or not

Paper trading is a kind of education in itself. If you are keen on taking up professional trading, you can use it to assess, whether you have the knack to trade profitably in the stock market or not. Starting out by using this route also enables you, not to waste away your hard earned money, in stock trading without the adequate knowledge and experience.

Simultaneously, it provides you with the opportunity to practice and steady your hands at trading without any risks involved. Today, there also exist a variety of “programs or applications that attempts to reproduce or duplicate some or all features of a live stock market on a computer so that a player may practice,” informs Wikipedia.

Trading education empowers you to ride the "bulls" and "bears" stages better

We are often told that nothing can substitute real life experience! While there is no doubt about this, it is also true, that nothing can substitute education either, especially when it comes to trading. Trading education gives those who have started trading professionally, the opportunity to learn and polish up their basic trading skills. By enabling you to correctly comprehend the stock market, trading programs give you a leg to stand on, during both the ‘bulls’ and ‘bears’ periods.

It provides you with the opportunity to learn from others' mistakes

Whether you are pursuing an online program or a full time course, trading education gives you the platform, to learn from the experience of numerous experts from around the world. It cuts back on your need to spend the amount of time they did, and suffer the hard experiences they went through. Such courses, equip you with knowledge about trading strategies, theories and the rules and regulations involved.

An education in trading equips you with vital skills and minimizes your risks

Trading education enables you to know the rules of the game before playing it. It helps you understand the core concepts related to trading and teaches you the ‘Do’s and Don’ts’ of the sphere. After undergoing a trading program, you begin to decipher market psychology and are able to protect yourself from becoming a victim of market manipulation and high frequency systems.

It gives a rational basis for you to make your trading decisions

Instead of gambling away your money in the stock market, simply by basing your ‘buys’ and ‘sells’ on hunches and gut feelings;  an education in trading, empowers you with accurate knowledge and strategies, to base transactions on. Such a course helps you pick up the right stocks, manage your portfolio more effectively, apply position sizing and use essential risk management tactics.

About the author: This article was written by Plator. L. Makreisat, a specialist financial writer, who believes that trading education, is a must if you want to make money in the stock market.

Image: Rafael Matsunaga, CC BY 2.0 "San Paulo Stock Exchange"