With the evolution of the internet and the volatility of the financial markets, more and more people are feeling it beneficial to educate themselves about taking responsibility for their own investments as opposed to leaving it in the hands of brokers, many of which still get remunerated even if their client loses money.
It’s becoming more and more appealing for private individuals to actually learn how to trade on the stock market and be more “hands on” with their investments.
Paul Harrison sits down with Marcus de Maria, Owner of Investment Mastery, a company that teaches private individuals to trade their own money on the financial markets, to get his three insights into becoming a successful private trader.
Marcus de Maria, Owner of Investment Mastery
Insight 1: It’s more about you than the strategy
There is no Holy Grail when it comes to trading strategies. It’s most important that the person who is trading the portfolio actually develops into a trader as opposed to looking for some “secret strategy” that will make them millions. Any advanced traders will make a strategy successful, but a complete beginner can take a very easy strategy and not make money with it.
Insight 2: Keep it simple
When starting out as a trader, start very simple and very small. Don’t fall into the trap of believing that the more advanced a strategy, the more money it’s going to make you. Start off with a simple strategy, practise, see what works and what doesn’t and build from there.
Insight 3: Make sure you have support
We become very aware, very quickly that there is often a world of difference between learning something in theory and actually applying it. It’s times like these that the support of a more advanced trader as a mentor or a coach is invaluable. They can help you see areas to improve on and help you correct mistakes.
Q&A: Marcus de Maria answers Justin Doherty’s questions on becoming a trader.
Justin Doherty is a UK-based South African who is interested in trading his own money on the financial markets
How long does it take to become proficient in trading?
This really varies from person to person, how much work they put in and how active they are with their trading. The record that we have for someone who goes from workshop to full-time trader is just four months but normally people can get a pretty good idea of what they are doing in the markets after three to six months
What trading software is best?
When people are starting out, it’s not really needed to pay for trading software. There are plenty of free programs out there to start off with. Our beginners start with OptionsXpress who have free charting software and a virtual trader (not risking real money) so there is no risk. More advanced traders can buy more advanced platforms but even some of our advanced traders are still using free software.
What happens if the markets crash?
It’s crucial to be able to make money regardless of what the current market situation is. Most people know that if markets are going up, you can make money but most people don’t actually realise that you can actually make money when the markets go in a sideways channel or sell off too – this is called “shorting” the market. Making money in all market conditions give you the best chance of trading success.