When one first enters the trading game, it is most often challenging to know how to prepare for it. Even if it is an appealing approach to increase profit, it would not be as fruitful as one may imagine without a fundamental understanding of the basics and a few preparations.
How should one prepare before getting into trading?
The most important thing when it comes to trading is to know how much we can lose. Risk management is one of my main focuses in trading and investing. It is much harder to make money than to lose it again. One bad trade could potentially eat away all our previous profits. That is why I think setting budgets is so important. Using all our money in one trade is to risky in my opinion. Diversification is very good for beginners, if instead of doing 1 trade we split our money into 5 different trades we are more protected. The chances of 5 trades turning sour is smaller.