The first part about trading
The world of trading is not just screens filled with numbers and colorful charts; it is a science that combines psychological discipline, strict financial management, and technical and fundamental analysis. If you are thinking about entering this field, here is the basic roadmap to understand this world:
1. What is trading at its core?
Trading is the process of buying and selling financial assets (such as cryptocurrencies, stocks, or foreign currencies "forex") with the aim of benefiting from price fluctuations over varying time periods. Unlike "investing" which focuses on the long term (years), "trading" often focuses on seizing quick opportunities.
2. The three pillars of success
To succeed as a trader and continue in the market, you must master three aspects:
* Analysis (strategy):
* Technical analysis: Studying past price movements using candlesticks and indicators to predict the next movement.
* Fundamental analysis: Keeping track of economic news, project updates (like Binance news or currency updates), and global events that drive the market.
* Risk management (the most important):
The biggest mistake beginners make is risking their entire capital in a single trade. The golden rule says: "Do not risk more than 1% to 2% of your portfolio in any single trade".
* Psychology (psychology):