Learn Stock Trading a Proven 20 Step Process [By a Pro]

What is your plan to learn stock trading? As a certified market technical analyst with IFTA, I believe I have the right plan for you.

Learning Stock Trading & Investing

Learning stock trading and investing takes a lot of work.  There are no short-cuts, but you can teach yourself by learning from the wealth of books, videos, podcasts, and training courses available. You must treat your investing seriously and not take undue risks with your capital, there are no get rich quick schemes.

10 Key Steps To Learn Stock Trading

• Learn Stock Trading from Books
• Watch Movies to Learn About Stock Markets
• Watch Our Learn to Trade Video
• Listen to Trading Audio Books & Podcasts
• Get a Free Stock Trading Course
• Get Professional Stock Market Training
• Get Free Stock Analysis Tools
• Get the Best Stock Trading Software
• Prepare Your Trading Strategy
• Avoid Stock Market Crashes

Stock Trading Interactive Learning Guide

Move your mouse over the learning elements to interact and jump to relevant articles of interest.

Learn Stock Trading Plan -- Click, Touch or Hover over any image for further information and insights.

1. Learn Stock Trading from Books

With 1000’s of books to read, where do you start?

Check out our Top 20 Best Stock Market Investing Books Review.  It also includes the top 14 books that PRO Market Technical Analysts study to qualify for IFTA (International Federation of Technical Analysts) or CMT (Chartered Market Technician) Industry recognized certifications.  We have it covered from all-time bestsellers to academic studies. Alternatively, jump to our PRO Technical Analysis Top 14 Books

2. Learn from Movies & Documentaries

If you sit in front of a computer all day and read books in bed, what do you do in your downtime during the evening? Why not watch a financial thriller, stock market movie or a true story.

Sit back with your feet up and convince your partner to watch a film, perhaps the “Wolf of Wall Street”, “Boiler Room” or my favorite, “Inside Job”.   Read our Top 20 Best Stock Market & Financial Movies Review to find a great film to watch, guaranteed not to bore you…or maybe not.

3. Watch Our Learn Stock Trading Video

This video will guide you through the entire process to Learn Stock Market Trading

4. Learn from Stock Market Audio Books & Podcasts

Bored of reading?   Have too much energy to sit down and watch a stock trading movie.  Why not listen to a great book while commuting or gardening or out walking the dog.

Our Top 20 Best Stock Market & Finance Audio Books Review has some cracking listens, such as the highly-rated “Flash Boys” by Michael Lewis or “The Quants” by Scott Patterson.  Fill your day with learning whilst not being chained to your desk.

Listen to a Stock Market Podcast -- The Liberated Stock Trader provides useful lessons via our Learn Stock Market Trading Podcast Series -- simply search for Liberated Stock Trader on your smartphone.

5. Get a Free Stock Trading Course

Everyone wants something for FREE.  So here it is.

Liberated Stock Trader has a large Free Training Course -- “The Trading Academy” with 100’s of lessons and videos.

It includes our structured 18 module “Course 101 -- Understanding the Stock Market” -- with an online test at the end.

Stock Market Educational eBooks.

We provide two great eBooks in Adobe PDF format click below to download them.

• eBook – Inside the Traders Mind eBook – Inside the Traders Mind
• eBook – 10 Powerful Stock Charting Insights eBook – 10 Powerful Stock Charting Insights

6. Get Professional Stock Market Training

Alternatives to Free Courses include courses either in person in a seminar setting or online training.

Often premium courses will include video lessons and email support.  Going for a premium course will typically help you learn faster and have much higher quality content, so you can save time and effort by getting the best first.
Liberated Stock Trader offers the “PRO Stock Trader Training” to enable you to gain the knowledge and confidence you need, it includes:

• Print Edition Book & eBook
• 16 Hours of Online Video Lessons
• Private Members Group for Q&A

7. Get Free Stock Analysis Tools

They may not have all the bells and whistles compared to their “Pay For” competitors, but they are good for starters and will not put a dent in your wallet (or purse).
Read our review of the 10 Best Free Stock Charting Services on the Web. Spend some time playing with them and getting a picture of what you need before selecting a premium package.

8. Get the Best Stock Trading Software

You are now progressing your knowledge and experience in the market and realize that there are key features you need for your stock trading analysis, such as Back-testing, powerful charts, specific indicators, real-time data and streaming news… but which packages are the best for you?

We sorted through the many high quality (and low quality) Stock Analysis Software vendors to bring you our in-depth review of the Top 10 Stock Market Analysis Software Programs. It’s the best review on the Web (but I would say that wouldn’t I)

If you are not so interested in powerful stock chart analysis and are more driven towards stock screening (filtering companies by fundamentals like P E Ratio, Earnings per Share or Debt to Equity) then check out our Stock Screener Review

9. Prepare Your Trading Strategy

• How will you approach the stock market?
• What will you invest in?
• When will you invest & why?

You need to form a consolidated stock trading strategy blueprint.

There certainly is a lot to consider when building out your investing strategy.  There are core questions such as should you use a day trading strategy versus a buy and hold strategy.  Is Value investing like Warren Buffet for you or is the more time and nerve intensive swing trading more your style.

What is certain is that you will need to be able to spot and avoid stock market crashes and be able to establish your trading rules based on your stock trading style.  Also, advanced traders will want to ensure their system is back-tested, meaning it has worked in the past.  Finally, if you are trading the earnings announcements or your stocks are susceptible to news based price swings you may want to choose a real-time high-quality news provider.

10. Learn to Avoid Stock Market Crashes

Ensure you have a strategy to avoid the next stock market crash.

A stock market crash is an unfortunate and historically inevitable part of trading, as are tsunamis to the natural world.  Just like tsunamis, stock market crashes devastate those involved.

Prepare yourself for the next market crash by understanding the triggers and warnings that can be seen through technical analysis.

“How to avoid the next stock market crash” is the latest publication from Liberated Stock Trader, this book will help you protect your investments.

Published Feature in Stocks & Commodities Magazine

11. Establish Stock Trading Rules

What chart indicators will you use? Under what conditions will you buy a stock? When will you sell a stock? Why did you buy the stock and are those reasons still true?

So many questions and here are some answers.

These are all known as the trade rules.  If you establish your criteria for buying, holding and selling a stock, before you buy it, then it can help to take the emotion out of a trade.  Read 10 Steps to a professional stock market system.  Emotions are your worst enemy, you must treat your investment decisions with a dose of logic not a slice of gut feel.  This is when back-testing comes to the rescue.

12. Learn System Backtesting

You may understand your reasons for a particular trade, but over the long term does your hypothesis make money?

An untested hypothesis is not worth the paper (or screen) it is written on.

This is what is called back-testing. An example of back-testing is the Stock Market Crash Detector.  This system is focused on trying to predict a stock market crash.  There are numerous elements.  Stock price fluctuations & price versus specific indicators.  While system back-testing is time-consuming it helps you understand which of the many indicators, such as Relative Strength Index (RSI), Balance of Power (BOP), Moving Average Convergence Divergence (MACD), actually work in a real-world environment in the past.

While past performance is no indicators of future performance, you can see statistically over thousands of trades what has worked and has not worked.  If you want back-testing -- read our Top 10 Stock Market Software Review and look at the section Systems & Back-Testing Score to find a suitable product.

13. Select a Real-time Trading News Service

“Roll Up, Roll Up, Read All About It”

If you want to stay in touch with Macro or Micro Economic Events you will need a good source of news.  Trading the news is a strategy some people adopt.   There are many good sources of news for you to look at including Reuters, Bloomberg & Investors Business Daily. However, if you want real-time streaming news and innovative market insight take a look at our review winning Benzinga PRO News Service

If you trade the news, you will want news delivered in real-time and that might cost.

14. Choose an Investment Vehicle

Why does Wall Street call them vehicles?  Well perhaps they want it to sound complex, or perhaps it is a reference to the transportation of your money to another destination.  But when you think about it, Vehicle is a good analogy.  Stock Investments can be seen as a car, some stocks are Lamborghini’s (fast and exciting yet inefficient) while others are a Toyota Prius (practical, not pretty but efficient and safe).

Binary Options & Contracts for Difference are like riding a fast motorbike -- a great rush, requiring huge amounts of concentration and ultimately risky.

Exchange Traded Funds (ETF’s) and index funds are like buses, they are cheap, reliable and ultimately get you to where you want to go without any effort on your part.  The ETF bus is a good place to be, you never have to worry about beating the market, you are always performing at the market, with the minimum of effort and minimum of Tax implications.

The book Unshakable by Tony Robbins lays out this argument beautifully as does “The Little Book of Common Sense Investing” by John C. Bogle.

Stock Options are fairly complex calculations based on time and price, perhaps could be called a Segway… although I may be taking the analogy too far now.

Trading Stocks vs ETFs

If you pick the right stocks your returns can be excellent. But picking the best at the right time can be extremely challenging.

What about Index Tracking Exchange Traded Funds (ETF’s)?  What are they, how are do they compare?

Read the Pro’s and Con’s of Stocks versus ETF’s here and learn more about mutual funds

Dividends are also a key benefit of investing in company stock, find out more about dividend investing in our Dividend Investing Secrets.

Dividends are a great way to secure a solid fixed income revenue stream, our in-depth analysis of the Dividend Kings and Dividend Aristocrats will give you tremendous insight into where to place your investments.

Trading Stock Options

Options were designed as risk protection but they can be used for profiting greatly.  Providing you focus intensely on strategy and execution. There are 2 books in our Top 20 Stock Market Investing Books Review focused on leaning Stock Options, “Getting Started In Options” by Michael C. Thomsett & “The Bible of Options Strategies” by Guy Cohen.  Both I consider compulsory reading before you enter the fray.

In addition to these books read our Top 10 tips for options success.

Trading in Binary Options or CFD’s

Both Binary Options and Contracts for difference are strictly for advanced investors and involve elevated levels of risk.  If you want to take your money for a ride on the Ducati Panigale Superbike, then this dangerous and risky path is for you.

Be careful here and don’t blow up your future investment pot apportion only a small percentage of your investment pot to Forex and CFD trading.

Both CFD’s and Binary options are not permitted for US investors.

15. Choose a Good Broker

Do you live in the past, or in the future?

The past, where access to the stock market was limited to a Stock Broker, who would call you on the phone and convince you that the latest hot stock was worth investing in and you would believe him. (see the film Boiler Room in this Movie list)

The future is the world we live now, whereby you can research thousands of stocks, instantly see news and earnings and see the past performance of a company then execute your trades online for a minimal cost.

$0 Commission Stock Brokers

As a Liberated Stock Trader, you realize that you need to be in control of your own decisions.  Choosing a broker means selecting those that minimize cost and enable good market access with great customer service and a reasonably low minimum account balance.

Read our Best Online Stock Brokers Review which also highlights the best stock brokers for online stock trading for beginners.  The review winner was Firstrade a first class USA broker that recently moved to $0 commission fees, yes that means there are zero commissions on trades for market participants.

Our Firstrade and Interactive Brokers reviews also highlight that they are also excellent for active traders, meaning those that trade often and hold stocks only for the short term.

Also if you want to trade Foreign Exchange read our Best U.S.A. Forex Brokers Review.

Our favorite 6 brokers are evaluated in detail in our In-Depth Broker Analysis, and in you are interested in trading penny stocks, check out our Best Penny Stocks Brokers Review

If you live outside the U.S.A. but want to trade in the low-cost U.S. markets, read our Guide to U.S. Investing for non-residents.

Advisory Brokers

Make no mistake, advisory brokers make money when you execute a trade.  This means they will always be recommending that you sell a particular stock and buy another one.  They make most of their money on the trade costs and not on the profit because the transaction cost is guaranteed and the future profit of a particular investment is not.

Your best interests are irrelevant to them. Make your own decisions and minimize your costs with a discount broker.  There are no recommendations for further reading here.

16. Execute your Trading Plan

Investing is a business, not a hobby.

Continual improvement and adaptation is the key to success.  All of these factors are covered in our Liberated Stock Trader PRO Training

17. Analyze Stock Market Direction

The direction of the market will overall dictate the direction of your individual investment.

That is a “FACT”.

Although, some companies are so large, like Facebook, Intel, Apple & Microsoft that their direction might influence the direction of the market, at least for a short period of time.

When there is a market collapse, all stocks fall, even the good ones.

When there is a rampant bull market even the worst stocks rise.

So, what is the lesson?

You can use DOW Theory to assess market direction using the major indices. Dow Theory is discussed in depth in the PRO training.  You can even use Ichimoku Cloud Theory to try to predict market direction.

You can also stay up-to-date with our level-headed market analysis at our Stock Market Today page

18. Analyze Your System’s Performance

So you have a system and it works.  It is good practice to always check, back-test and continually try to improve it.  But make sure that a change to your system is an improvement and does not increase risk and reduce reward.

19. Building Wealth & Compound

So now you have done the hard work, you have learned, you have your preferred analysis software, you have built your rules and you are executing them.

How do you become a stock market millionaire?

What percent return can you expect?

How long will it take?

All these questions and more are answered in our Guide to Becoming a Stock Market Millionaire.  This is covered in more depth in the PRO Training

20. Enjoy Life

Who am I to tell you how to enjoy life -- no one that’s who.

How you enjoy life is all down to you.  Money is not everything, wealth is a matter of perspective.

You are rich if you have a family that loves you, a dog that loves you, a partner you have a connection with, or even if you have contentment in your heart.

I wish for you to be healthy, wealthy and wise.

Big Bonus -- Free Beginner Lessons

The wealth of investing lessons at Liberated Stock Trader are available to you now.  The lessons below form the foundation of the Trading Academy Free Training Course.  You can also register for our Trading Academy FREE & get Course 101 -- Introduction to the Stock Market and take an end of course test.

Learn Stock Trading Summary

Learning stock trading and investing takes a lot of work.  There are no short cuts, you can teach yourself by learning from the wealth of books, videos, podcasts, and training courses available. You must treat your investing seriously and not take undue risks with your capital, there are no get rich quick schemes.

Now it’s over to you.  Did you like this article, do you have feedback, what do you think?  Scroll down and leave a comment to let me know.