How to Start Trading
To start trading, pick one instrument and one timeframe, learn to write three prices before every entry, and size the position from the stop rather than from the setup. Then record 100 trades before judging anything, because the order of these decisions matters more than any of them individually.
The first decision is not which strategy. It is how much of the account rides on each attempt — and that one is made before you have looked at a single chart.
Before you start
Money you can lose entirely. Not money with a job. This is the only precondition on the page that is not negotiable.
One instrument. SPY is the usual honest answer for a first account: tight spread, real volume, and no single company whose announcement can gap it violently overnight.
A free charting account. Every major platform has one and it is sufficient for everything here.
Nothing on this page requires a paid tool, a course, or a signal service.
The steps
1. Pick one instrument and one timeframe
Not because they are the best — because everything after this depends on them being fixed. Changing either resets the record.
2. Learn to write three prices
Where you get in, where the read is wrong, where you are done. All three before the position exists, per entry and exit.
3. Size so that five losses in a row is dull
Money you will risk, divided by the stop distance. At 2% a trade, five losses leaves 90% of the account; at 20% it leaves 33% and needs +205% to recover.
4. Find your round-trip cost
Spread plus commission, divided by a typical bar’s range. That single ratio decides more outcomes than any indicator you will ever add.
5. Record every trade, including the ones you skipped
Entry, stop, target, and one sentence of reason — written before the outcome is known. If the sentence will not come, do not take the trade.
6. Take 100 of them before changing anything
No adjustments in between. A hundred trades pins a win rate to about ten percentage points either way; twenty-five leaves it uncertain by twenty.
How to tell it worked
Not by the money. By four things you can count at the end of the hundred.
Every trade had three prices written before entry. Count the ones that did not — that number is the first thing to fix, and it has nothing to do with the market.
No trade risked more than the number you set. One that did is not a bad trade, it is a broken rule, and it will be the one you remember.
The instrument and timeframe never changed. If they did, you have a record of several experiments rather than one.
And you sat through a losing run without changing anything. Five in a row is ordinary — one appears inside a measured record of 64 wins and 59 losses, and it took 35 bars to play out. If a bar were a day, that is about seven weeks.
What to expect in the first year
Mostly nothing. The most-taught beginner signal fired four times in 576 bars, with 329 bars between two of them — 57% of the history with nothing to do.
Costs larger than you expect. On one measured history, 123 trades paid 67% of the gross in costs and netted a fraction of what buying once and waiting made.
A losing run that feels like proof. It is not proof; it is what an even-money rule does over a hundred attempts.
And no moment where it becomes obvious. The what nobody tells beginners page has the rest of this list, measured.
What to learn, and in what order
The order below is the point. Most people run it backwards and spend a year on the last item first.
One: the arithmetic. Position size, cost per trade, sample size. None of it needs a chart and all of it decides more than anything that does.
Two: the chart itself. Candles, levels, structure — how to read a chart in four steps, and nothing beyond it yet.
Three: one entry method. One. Written down, tested against a schedule per how to find an entry, and left alone for a hundred trades.
Four: everything else. Indicators, patterns, sessions, the whole vocabulary. It is genuinely useful and it is fourth, because none of it changes an outcome that the first item has already decided.
The reason the order gets reversed is that item four is the only one that is interesting to watch, so it is what almost all of the material is about — 844 videos on relative strength index (RSI) against 26 on how to choose an entry at all.
The original data
Across our study of 24,971 trading videos, 424 cover starting to trade. The median one gets 49,260 views — among the highest measured anywhere in this glossary — and only 50% fail to pass 50,000, which is one of the lowest saturation figures here. The median length is 18.1 minutes.
The corpus carries description text for 91 of those 424, and across those 91, two mention invalidation, failure, or what a bad read looks like.
About one in forty-five. The most-watched entry point into the subject, and the material almost never mentions a read going wrong — which is a reasonable summary of why the first year surprises people.
When it fails
The size was decided by the setup
“This one looks good, so I will take more” is how an ordinary losing run becomes permanent. The size comes from the stop, and the stop comes from the chart.
The rule changed every week
A record of a rule you kept adjusting is a record of many rules with one trade each — the trading journal failure, arriving in the first month.
The boredom got filled
Every hour spent watching creates pressure to justify the hour. That pressure, not bad analysis, is behind almost every trade taken outside a plan.
You judged it from the finished chart
Every chart you have learned on had its answer already printed. The live one does not, and learning to decide without it is the entire skill.
Related
How to build a trading plan turns these six steps into four numbers on one page.
How to read the market is the session routine that sits on top of them.
And what nobody tells beginners is the measured version of what the first year actually contains.
If I could send one thing back to myself at the start it would not be a strategy. It would be the sentence that the boredom is the job, because I spent two years treating every hour I was not in a position as an hour I was wasting, and that assumption cost me more than every bad read combined.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.