How to become a full-time Stock Trader in Australia
Maybe you want to trade stocks in your spare time while you work from home, or maybe you’re hoping to transition into a full-time trading career. If you’re curious about what it takes to become a successful trader, you might be overwhelmed by the sheer amount of share trading information out there.
Here’s how to start investing in shares.
What skills are essential for traders?
It’s no secret that online trading is a competitive industry, and there are three critical skills every trader needs to succeed.
Analytical skills
In your day-to-day life as a trader, you’ll analyze the market constantly. There are a few ways to do market analyses. Some traders focus on a company’s fundamentals, tangible elements like their balance sheet, profit-and-loss ratio (P/L), and price-to-earnings (P/E) ratio.
They also use macro-economic data, like inflation and gross domestic product. Fundamental analysis is based on the idea of an asset having a fair value, and traders try to identify underpriced and overpriced assets and then buy or sell accordingly.
Other traders focus on technical analysis or share price analysis. It involves tracking historical stock charts and identifying patterns. They also use price-based indicators like moving averages to make informed decisions.
See here to find out more!
Level-headedness
You could do all the analysis in the world, but it means nothing if you can’t block out the noise of day-to-day market movements. In other words, you need reasonable emotional control.
The market fluctuates all the time, and everyone has an opinion. There’s some value in tapping into market sentiment, but it shouldn’t impact your strategy too much. A skilled trader knows not to be swayed by fear or greed when deciding whether to buy or sell.
Discipline
The final must-have skill is the discipline to follow a plan. For many people, this is hard to do — especially when the market conditions are challenging.
For example, one part of discipline (and level-headedness) is understanding how to manage risk. Losing money is inevitable as a trader. It’s part of the job, and every trader has to accept that before entering the market.
How much money do I need to become a trader?
You could start trading with as little as $1,000. Some brokers will also let you buy shares with less money, so the initial investment is up to you.
But don’t expect to make a fortune overnight! It takes time to grow capital, and the amount of investment is an essential input. Plus, as we mentioned before, losses are part of the trading process. When taking on those risks, it’s essential only to invest what you can afford to lose.
The best share trading strategies for beginners
Now that you know how to trade in Australia, you can start building a share trading strategy. The key is to create a strategy for the critical aspects of trading and then bring them together to form an overall plan that works for you.
For example, you might think about how you’d approach these areas:
- What to buy
- When to buy
- How much to buy
- When to sell a profitable trade
- When to sell a losing trade
How to grow as a trader
All of this may sound overwhelming, but as a new trader, one of the best things you can do is practice, then practice some more. Monitor the charts and the news, and start identifying the best shares to invest in. You could even open a demo account to get more comfortable on the best share trading platform and test your strategies.
Trial and error can take you where you want to go, but it can take years. If you want to accelerate your growth, find people to learn from—people who have gone through the same struggles and challenges and come out the other side victorious.
In Conclusion
After deciding what kind of trader you want to be, focus on learning everything about the market and polishing those critical skills like discipline. By doing that, you’ll be in an excellent position to identify opportunities and build your guiding strategy.
