Trading can be quite the confusing subject and let’s be honest, it can be quite boring when explained by some monotoned guy that couldn’t keep a crowd of five-year-old kids awake. As much as we ladies enjoy our sleep or when the kids finally take a nap, we cannot afford to sleep on the stock market!
Let’s take a look into a few key questions vital for getting you started on the right track to profit from the stock market.
And profiting means earning anywhere from a couple extra dollars for that cute outfit you have been wanting, to potentially earning enough to live off of comfortably.
Question 1. Why are you wanting to trade stocks?
The first question we must ask ourselves is why we want to begin trading stocks in the first place? Surprisingly, you have more in common with other people than you realise. There may be a million different reasons why one may begin into stock trading, but in general, the root of all causes in this case would simply be, money.
There’s nothing wrong with that, but what does the money represent to you?
Is it clearing your debts that are weighing you down?
Or, is it being able to be financially free?
May be to escape a 9-5 job you hate?
Or being able to work flexible hours from home in between the school drop off?
Know your trading why
Whatever the case may be, this is something that must be added to the ever-so-long list of things to do. Having a general understanding of where you want your trades to take you financially, will set you up for realistic goals and a clear plan.
Trading isn’t easy or a get rich quick scheme – so your reason is critical in the ‘why’ being big enough and motivating enough when things get hard.
All of us independent women trying to make it on our own knows that even when we get tired, we still have to keep pushing through and go to work because we depend on ourselves. We hold ourselves to high standards and higher expectations.
Let your self-love be your motivation!
Stock trading is no different, your reason for starting and sticking with it has to be important enough to you to keep you pushing through when times get hard and stocks drop. Taking a loss is not easy in any sort of way, but sometimes it happens. When that happens, you have to turn to your reasoning for doing it and gain the motivation again to keep going. Whether your motivation is getting that new handbag or supporting yourself and your family, make sure it is important to you.
Recommended reading for new traders:
Question 2. What type of asset classes peak your trading interest?
The next important decision you must make is what kind of trader you want to be. There are different types of trading and asset classes, for example: crypto, stocks, forex and commodities.
- Crypto – Cryptocurrency, trading digital coins such as Bitcoin, Ethereum and Litecoin.
- Stocks – Trading individual company stocks like Amazon or Tesla, or groups of companies like S&P 500.
- Forex – Foreign Exchange trading, buying and selling of currencies as the values fluctuate.
- Commodities – Trading assets such as gold, silver and oil.
Related Reading: Top Online Trading Platforms
If it isn’t interesting TO YOU, you won’t actively learn about it.
Learning about each type will help you understand what kind of trader you aspire to be!
You will need to know what takes your interest and works for you. If it isn’t interesting, you won’t actively learn about it. Especially on a daily, on-going basis.
Put the kids to bed early one night or tell the girls you can’t make it out tonight so you can study up on your future! As busy as we ladies are trying to make ends meet, it is hard to find the time between family, work and maintaining some type of social life but it is worth it.
Question 3. What trading style looks best on you?
Once you have put in a little time to this, then you will need to decide on what strategy works for you – this is probably the most critical factor. Factors in things like time availability, risk profile, knowledge and style bias.
Be honest with yourself on how much time you can afford to contribute, because this will make all the difference when choosing your strategy.
Just how we carefully plan and pick out our clothes and accessories for work or a night out, we have to carefully pick out our trading style.
Let’s go over a few types:
- Are you a scalper? – small trades that you take quick profits eg, trades can be open for seconds to minutes
- Day trader? – trades that are open from minutes to hours, but usually never has a trade left open overnight
- Swing trader? – trades that can be open for days to weeks, some cases month
These are all different to traders. Each is unique and carries its own set of rules to play by just like outfits for different occasions.
A trading style and time that suits you
If you can’t be online all day, then scalping won’t work as you can’t check market movements in real-time. Likewise, if you have high anxiety or risk aversion, then trading may not be for you at all, or at least leaving positions open overnight, when in a loss, may exacerbate the problem.
The strategy you choose should be based on your personality and schedule. As we discussed, be honest with yourself on how much time you can contribute to the cause. If you can only contribute a few hours, that is completely fine! However, just like planning a wedding, you have to carefully plan and coordinate with your stocks and trading. You can’t just jump into a trading position within planning beforehand what you think will happen and how you’ll react in different scenarios.
Just like planning a wedding, you have to carefully plan and coordinate with your stocks and trading.
That’s not all though based on your personality if you are impatient and quick thinking you are more likely to be a scalper, as you will get quicker returns. These types of personalities tend to be too impatient at swing trading and close trades too early.
I cannot stress enough the importance of being honest with yourself on your patience level. Life is different for everyone and has different demands, there is no shame in admitting you can only handle certain limits.
Question 4. How are you going fund this?
Unfortunately, ladies we cannot clip coupons or get the latest retailer discount offers to our inbox for trading stocks, but what we can do is sit down and figure out how we can work it into our budgets!
In order to dive into the trading world, you do not have to have a bunch of money!
In order to dive into the trading world, you do not have to have a bunch of money! That is a common myth but is just that, a myth.
Stocks can be traded for as little as five dollars! Some methods mean you don’t even pay a trading fee or commission and I’ll them all in future steps. If you want to jump ahead, you can see the different brokers and platforms then you can here.
I was definitely no stranger to being in between pay checks and it all seeming like a lot of money at the time! If you have to put five dollars a week back to save up, that is completely fine!
Having an idea or ball park amount will help you plan out your investments accordingly! If you can figure out how to pony up the money for a girl’s weekend, you can certainly figure out how to work your future into your budget. And the best part, it won’t cost as much and will financially benefit you later!
So, work an extra couple of hours or cook at home a little more instead of ordering take-out and invest in your future! Keep in mind, this will only be temporary sacrifices and with the money you earn, you will be able to do even more!
Put these down to start a trading plan
Ok, so now we have an idea of the information we need to begin our adventure into a male dominated world! Please do not feel intimidated, beautiful. If you sit down after studying up and make an honest list of answers to the above four questions, you will be on your way to success. Or at the very least those cute heels you were looking at for that dress you’ve been wanting to wear out with the girls! Let’s review just a bit.
- Jot down your why. This is your reasoning for getting into the trading world. Being able to physically look at your reasoning will help keep you motivated when you take a loss (eventually, it will happen to everyone at some point) or when trades are not very profitable.
- Research different classes. After doing your research into the different classes, write down what class or classes you are interested in. If there is more than one, that’s ok! As we mentioned, it may take a few changes before you get the one that works for you. However, I suggest starting with the one that peaks your interest the most!
- Set your style of trading. Were you honest with yourself about your level of patience? Just to be sure, reevaluate yourself a few times. Once you are confident with your decision, list what trading style you think will work best for you. As with everything else about trading, you may find that you want to switch that up as well.
- What’s your budget? As with your reasoning, being able to physically see your budget will help you stick to it and reach your money goal! Look at it as often as you need!
Finding your trading match
Commitment is key in trading, but after sticking to your strategy and following your trading rules, you may realise a strategy is not working for you. If so, you’ll need to assess the strategy. Then look into what you can do to change the trading rules you’ve set for yourself and/or possibly changing the strategy all together.
Trading is like finding your soulmate, it takes time and patience (and may be a few dubs along the way).
It may take a few tries with a few different strategies but just like finding your soulmate, it takes time and patience. You may go through a few duds but with time and practice, you can achieve the goal you have set!