One of the most important things to remember when becoming a trader is that you need to leave time in your schedule for research. It can be difficult, and the urge to just jump in is always there, but if you want to increase your chances of success, then research and learning is critical.
The importance of research
If you were to talk to the most successful traders, you would find that many of them spend a few hours each day at their trades. They would also have time away from the computer, favourite activities or hobbies, spending time with friends. And then there would be a chunk of each day that is spent researching and testing new trading ideas.
This shows the importance of research as part of your CFD trading life. Trading is a constant learning process where even the most successful and experienced trader will continue to work on new areas and develop their strategies. You will also find that the more research you do, the more patterns you will spot across different trades.
What kind of research should you do?
Any research is a good thing, but there are some areas or types of research that you should dedicate the most of your time to.
Know your markets
Markets can rapidly change and behave in unusual ways due to their collective nature. That’s why one of the most vital parts of research and learning is to know your markets. Understand concepts such as supply and demand, which are where external factors can have an impact on the market. Learn about how these can affect the markets as well as how these change the mindset of other traders.
The ideal way to do this is with a demo account on a trading platform where you can access historical data and learn as well as practice. That way you aren’t practising with real money but instead with virtual currency. All other aspects of the platform work the same as a live trading account and are a great way to learn.
Watch the wider world
As well as researching and studying the markets, you should also become adept at analysing how the wider world affects the markets. This means reading financial newspapers and blogs, visiting forums and even watching the general news. World events can impact the market, and it is essential to learn what this impact might be depending on the event in question. You will learn to use all of this information to make rational and profitable trades going forward.
Study the competition
As with many industries, it never hurts to spend a little time studying the competition and seeing what other trades are up to. Trading is no game, and when you first start, it can be easy to fall into the trap of treating it like this. By watching other traders, particularly experienced and successful ones, you can not only learn and develop your own strategies but also remind yourself just how real the trading world is.
The best way to undertake your research is a combination of a demo account such as a GCC Investing Demo Account as well as using a platform that offers a wide range of educational resources and the facility to mirror professional traders. You still need to put in the time to learn, to develop your own strategies and to understand what works best for you. But by using a platform such as GCC Investing, you can find a great many of the resources you need all in one place, saving you time and allowing you to be confident in what you learn.