How do I get started trading?
· 2 min readTrading
"It is not that I'm so smart. But I stay with the questions much longer." - Albert Einstein
To get started trading, it's very simple: Get a broker, put some money in, and buy and sell some stocks. If you landed here, you're probably wondering something else though: How do I make money trading?
We strongly believe that the right answer to trading is to treat it like the scientific method. If you want to do well in trading, you should be very rigorous in your process. The scientific process is very simple in theory: Have a hypothesis, establish an experiement, establish what the results would be if the experiement generated a random value versus expected change, run experiement, measure, repeat. This is exactly what we do for our trading process in-house and what most top-tier trading firms do at mega-scale.
What this means on a day-to-day is that if you wanted to this yourself, you should probably:
- Read a lot of papers. Don't repeat the same mistake someone else can teach you for free.
- Determine a key area of expertise. If you're always starting from 0, you're not going to make it very far.
- Design plausible, measurable experiments. Lots of financial experiments require large-scale infrastructure and extremely high-quality data (shameless plug: we provide both of these). What you design should be in the realm of the data that you can reasonably acquire.
- Optimize for metrics that you care about. Some strategies make very little money over time, while others tend to concentrate their returns around specific periods. This is dependent on your risk appetite and findings.
What this means on a day-to-day, you should most definitely NOT:
- Accept the existence of some holy grail solution. You can prove by contradiction that it doesn't exist. Anyone claiming this is running a scam.
- Accept that someone can teach you exactly what you need to do to be able to trade profitably. Anyone with that knowledge would be better off doing it themselves or asking an LLM to code that knowledge up for them (or, more rarely these days, coding it themselves)
- Use technical analysis as anything more than astrology. You can certainly use it to describe situations, but never to make decisions as some sort of signal. Just like you could describe an eclipse using astrology terms, doesn't mean the next Artemis crew should be chosen because they're compatible Capricorns. So, our take is: save your money, don't buy the courses being sold to you. You have to do the really hard work yourself. Stick to the scientific process!
This is not financial advice!
