Learn how to trade for beginners 2023 My number 1 strategy for superior results
Welcome to Straightforward Trading and today, I’m going to be teaching you how to go from a complete beginner to a professional trader and investor.
First, choose an asset that you would like to trade on the markets.
It can be a commodity, it can be a stock or a group of stocks in the form of the equity market like the SPX500, it can be a forex pair. It can be a cryptocurrency.
Once you have selected one, you need to search for a chart of the seasonal tendencies for that asset.
A Seasonal Tendencies Chart is a history chart based on what an asset is most likely to do month to month.
You’ll be able to see what an asset will do from January all the way through to December every year, and make an A+ setup trades based on the history of that asset, because the markets tend to repeat themselves over and over again.
If you just follow the Seasonal Tendency Chart, you will win a lot more than you lose.
Next you want to watch what the central banks are doing from the developed world.
They all seem to follow the same policy over time, though they can vary.
There are two types of policies. There’s dovish policy and there’s a hawkish policy.
The dovish policy simply means that the banks are printing their currencies more, but they are stimulating the stock market.
So generally, when they start doing this, you need to start looking at purchasing risk on assets. An example stocks would go up in a dovish policy.
The other policy that they run is a hawkish policy.
At the time of this writing, they are just slowing down on the hawkish policy, and they’re now turning to more of a dovish policy. In a hawkish policy, stocks tend to go lower because they are slowing down on the printing of currencies and they are raising interest rates. So you would need to be in risk off assets.
For example, one of the best assets to trade during a hawkish policy would be the US Dollar on the forex market because that US dollar tends to be stronger than the rest of the currencies.
The goal is to try and match the seasonal tendency with the central bank policy, keeping in mind that the central bank policy should be the highest priority, and the seasonal tendencies of assets should be 2nd in priority. I discovered this trading and investing in the year 2022.
Although I was able to be profitable for the year, not every trade or investment choice I made paid off. It’s normal to have losing trades, however we should learn from the trades or investments that didn’t work.
In reflection moving into 2023 the central banks flipped their policy to a hawkish policy around the same time as the Russian Ukraine Military conflict, which meant that they started to raise interest rates from nearly zero percent on all the first world currencies.
This should of been the time to close out all long positions on the stock market
We went through months and months of drawdown, which did turn around when the central banks started to print their currencies again.
This is when markets started moving higher by the 13th of October 2022 and the markets have continued to move higher ever since with healthy pullbacks.
At the time of writing this on the 6th of January 2022, it looks like the printing of currencies to support the market is continuing, it’s important to note, that this is currently having a conflict of interest with the 20 years of seasonal tendencies, therefore the central bank policy must be the highest priority when it comes to market analysis.
Remember this is not direct technical analysis, this is more of a fundamental analysis with a little bit of technical analysis.
I would also go on to say that any other analysis outside of what the central banks are doing and the seasonal tendencies is not really needed, unless you are trading a single stock, a single cryptocurrency or a forex pair however for any other assets out there what I have stated in this blog it is not necessary.
When you look at the charts, you should be deciding whether to go long or short on an asset.
If you’re going long, you’re expecting prices to move higher. If you’re going short, you’re expecting prices to move lower.
I recommend looking at the daily chart or the weekly chart.
The daily chart is the most accurate time frame. The weekly chart is the second most accurate time frame.
Remember, if it’s a weekly chart, you only have to check it once a week. If it’s a daily chart, you should check it once every day. You can decide which one will work for you based on your lifestyle, usually what happens on a Tuesday tends to continue till a Friday, though there can be weeks where there’s volatility.
Sometimes volatility comes into the market because of data releases or central bankers talking or even presidents.
You should pay attention to the economic data calendar and understand that sometimes the trades are not going to move when you think they’re going to move. However, the way you set up the trade with your stop loss or your long term investment strategy, you should be able to ride out the volatility without experiencing too much drawdown. As long as you’ve managed your risk correctly.
Risk management generally means how much are you willing to risk on everyone of your trades or investments.
As a rule of thumb, it’s good to just start out with a 1% risk on any asset and to split that risk between multiple trades.
Some trades are going to work, some trades may not work, but you should be able to win more trades then losing trades with this strategy.
In the future, when you look at my website, there will be documents on how accurate this strategy is.
Generally I get anywhere between a 70% win rate. I have experienced a 100% win rate, though this is not 100% normal, I would say at least a 70% win rate with this strategy.
If you’re risking the same amount on every asset and you’re winning 70% of the time, the winning trades will cancel the losing trades.
The next part of this strategy. This is if you’re a complete beginner. You may not like it, I highly recommend setting up a paper trading account or a demo account.
It basically means you won’t be using any real funds until you’ve proven that the strategy works.
I recommend that you demo trade for one to three months, then three to six months, then six to nine months, and then from nine months to 12 months to get a good amount of forward testing.
Then you can prove to yourself that it’s actually going to work. As a beginner, psychologically you’re probably going to want to put cash into the market as soon as possible.
I don’t recommend that you do this, however, it’s up to you. Once you have completed the demo trading and you’re happy with the strategy and you can see that the results are very good, you can now open up a real trading account.
Once you are trading a real account, there are two types of accounts.
There’s a leveraged account and there’s a non leveraged account.
I recommend you do a non leveraged account for long term trading and investing.
I also recommend you do a leveraged account for short term trading and investing.
The way that it works with leverage is that every time you put a trade on, you will make more money quickly.
However, if the trade fails, you will lose more money quickly. So it’s good to have those strategies in place.
Continue to trade your live accounts for at least another six months to a year and then look at your returns.
At this point there’s another strategy I highly recommend too.
The next strategy is going out and seeking capital. There’s a few ways that you can do it.
If you’re starting out with low capital, you will find that it’s very hard to get to the point of actually retiring. So the way that you can escalate this is through proprietary trading firms.
Now you have to be careful because a lot of these proprietary trading firms, they do have people that get funded. The majority of the traders that enter to try and pass the trading tests tend to fail.
So you can only really take A+ setup when you go to try and pass these tests. There’s only going to be at certain times in the year when that A+ setup may form on an asset that you think you could use to pass a prop firm test.
Even if you do pass a prop firm test, there’s also a good chance that you could lose the account, if you do get the account the goal is to keep it, so I would highly recommend reducing your risk size to a smaller amount than usual, and continue to only take A+ trades when they arrive to increase your chances of keeping the account.
There’s also going to be times where you go to pass the prop firm test and you miss the profit target as well. So you’re going to be losing money while you’re trying to get through some of these challenges.
However, if you have a superior personal account, profits from the personal account should be able to continue to get you the money that you need to take these prop firm challenges, instead of consistently reaching for your wallet let market returns pay for the prop firm accounts.
Remember, they are optional. I’ve actually done the numbers on a personal account. If you are a patient person, I think you will still get to where you want to go financially to become more free if you just continue to trade your personal account based on what I’ve said in this blog today.
Remember there may be a few failures along the way.
Understand, some of these challenges are pretty difficult to pass, so markets are not going to always be favourable for you to hit those results.
Understand too that these prop firms will give you large capital, some types of prop firms may not even have a test for you to pass.
However, they will want to see consistent results that you can prove.
It’s even better if you can do it on a real account and maybe even get it checked by an accountant to prove that it is actually a real account.
Another option would be to shop around to people that you know your returns on your live account, show them that you have a superior strategy, and then they may invest in you to trade their money.
A little disclaimer though. If you are not a licensed trader or professional investor that has a licence, be very careful with who you take on to trade their funds.
I would recommend you just talk to people that you actually already have a friendship with.
Going into the general public and doing too much of this could get you into trouble with the law.
Thanks for sticking with me to this point in the article. I’m not recommending that anyone do this. This is just my strategy that I figured out over five years, it’s also not financial advice.
I’d like to make a shout out to VP from the Nonsense forex who helped me to get started as well as ICT from the Inner Circle Trader. I took both of those strategies as well as what I learnt from Gerald Celente and Gregory Mannarino.
These four sources of information helped me to become consistently profitable for free when I didn’t have money for a professional trading and investment school, so I didn’t really have anything to lose and had everything to gain
If you would like someone to coach you and hold your hand through the process, you’re welcome to reach out to me.
We can trade together week to week over an online Google meet and I would be happy to coach you through the process.
Obviously there will be a fee for that because currently I’m under funded and I am on the path to seeking more capital, therefore the money I earn from teaching how to trade and invest will go towards my trading and investment accounts.
Reach out to me. Tell me your story.
I’m offering free consultations to just find out what I can do to help you as we move into the future.
Understand that inflation is going to continue and you should be looking at exposing some of your money into the markets to keep up with inflation.
You can capitalise on that inflation by getting more capital through funded programs or just being good at what you do on a personal account.
The markets are a great option because you can still start with very little capital and turn it into a decent amount of capital over a five to ten year horizon, especially if you use a compound effect
That’s all I’ve got for you today.
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Till next time
Happy Trading and Investing
James