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I want to trade for a living, and I'll soon have the money to start doing it. I have been watching the markets and paper trading. Are there other things I should be doing?
Becoming knowledgeable about the markets and paper trading is a good start, but nothing prepares you to become a good trader other than trading. Paper trading is an excellent way to learn the mechanics of trading, but you must have real money to get the real experience. You can start by putting on the smallest possible positions and work up from there.
What is a good average return for swing trading? Trading isn't linear.... Some months are going to be better than others. The focus must be on managing your risk at all times and the money will take care of itself.
What percentage of my portfolio should I put to work on any trade?
About 5% is the consensus that most use but it really is dependent on your strategy and risk tolerance. It is not one size fits all, it's about "managing the risk at all times".
Can I get returns of 5% to 10% a month?
Simply but NO! perhaps on a given month you'll make 5% or 10% but every month is going to be different. The market generally does everything possible to make sure you can't get a nice consistent return. We all must accept what the market gives us. Sometimes more sometimes less.
Could you comment on what to look for when taking a long or short position?
Technical Analysis and fundamentals are a good starting point to evaluate whether to go long or short a stock or any financial instrument for that matter. A trade should have three components: defined method, money management and proper trading psychology.
Is it reasonable to make $500 to $1,000 a week for every $10,000 in the trading account?
It is not reasonable to have any expecations about what the market will give you. Traders need to adjust to the market. The markets won't adjust to us to give us anythng that we may want.
How can I tell if I'm cut out for a career in trading? There are questionaires and psychological profiles one can take to see if they are of the right "cloth" to be a trader; however, if trading is for you, it will be obvious. Traders may hate the markets sometimes but they hate almost doing anything else more.
Should I paper trade first? Paper trade to learn how the mechanics work, then put on the smallest size possible after you have learned a trading method, trading psychology and money management.
How much time should a new trader spend looking at a chart?
As long as it takes to understand where the opporutnity is and what are the risks associated with a position.
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