Trading Stocks in 2025: From Beginner to Disciplined Trader

Why Beginners Should Understand Stock Trading Before Investing

For most people, understanding “stock trading” is often associated with the belief that it is a high-risk gambling game. However, the reality is quite different. Short-term trading versus long-term holding are distinct. The key point is not which method to choose, but to understand the differences and be prepared.

“Trading” refers to buying and selling stocks with a focus on speed, aiming to profit from price changes over a short period. The clear difference from natural investing is that traders need to think quickly and make decisions rapidly. Opportunities for profit exist both when the market rises and falls, but risks also increase accordingly.

The role of analytical tools, such as chart knowledge, trading volume, and various indicators, is important. But for beginners, building a foundational knowledge first is the essential step that should not be skipped.

6 Basic Elements Every Beginner Must Know

1. Open an account with a securities company (Broker)

The first step is to have a trading account with a broker. Currently, there are many options, both domestically and globally. Considerations should include fees, credibility, and platform convenience.

The account opening process is generally straightforward, with minimal required documents, and can be completed online. The minimum deposit required is not very high; many brokers allow starting with a reasonable amount.

2. Set an appropriate trading budget

This step is the foundation of financial management. It is necessary to set clear limits on your capital and ensure it is money you can afford to lose without affecting your daily life. Do not risk money used for bill payments or emergency reserves.

Standard guidelines used by experienced traders are to allocate no more than 10% of total assets to a single stock, and to start with a relatively small amount to gain experience. As confidence and skills grow, gradually increase the trading amount.

Planning also includes setting profit/loss targets per trade. The general consensus among experts is that losses per trade should not exceed 2-3% of the total.

3. Learn about frequently used order types

Knowledge of different order types is essential. Basic orders include:

Market Order – Buying or selling at the current market price immediately. You get a quick execution, but the price may not be as expected due to constant price fluctuations.

Limit Order – Setting a desired buy or sell price. The order executes when the price reaches that point. The advantage is control over the price, but the risk is that the trade may not be executed.

Additionally, there are Stop Loss and Take Profit, which are important risk management tools.

4. Practice on a virtual account before trading with real money

A firm opinion is to try trading on a demo account first. Many brokers offer demo accounts that allow you to experience trading without risking real money.

During practice, try analyzing a particular stock and monitor whether your predictions are correct or not. Doing this consistently for 3-6 months will deepen your market understanding and build confidence in decision-making.

Practice also provides an opportunity to test different strategies to find the most suitable one, and to study trading psychology, which is a crucial aspect often overlooked.

5. Compare your performance with standard benchmarks

The goal of trading is to achieve returns better than market indices, such as the SET Index or S&P 500. If you earn 5% annually but the index rises 10%, it indicates that the trader has not yet reached the target.

This comparison helps clarify whether your methods are effective. If results are not better, you may need to change your approach or consider investing in index funds instead.

6. Think long-term even when engaging in short-term trading

Although trading is a short-term activity, maintaining a broad perspective is still necessary. Don’t expect overnight wealth. Successful trading requires patience, continuous learning, and good emotional control.

Many successful traders operate under the principle that trading is only part of their portfolio, not everything. Long-term investments in other assets should be maintained alongside.

The Art of Risk Management: The Heart of Sustainable Trading

Managing risk is key. Even with only 60% accuracy, you can profit if you manage well.

Position Sizing - Don’t play all your cards at once

Never allocate all your funds to a single stock. Divide your capital into different parts. Each trade should risk no more than 2-3% of your total. This approach prevents large losses that could wipe out your account.

Stop Loss - Respect the boundaries

Stop Loss is setting a exit point before entering a trade. It’s not about setting it after the price drops. This is a crucial risk mitigation method. Set it beforehand and follow it strictly. When the price hits the stop point, sell immediately. Don’t believe the price will bounce back.

Avoid relying on random tips

On social media, there are many stock recommendations, but be cautious. Many may have hidden motives or unreliable knowledge. Relying on tips without your own analysis is risky. The best investment approach is to become your own analyst, use credible information, and develop deep understanding.

Record keeping and financial management

Keeping a trading journal is beneficial for two reasons: analyzing your performance and preparing financial statements. In many countries, profits from trading must be reported through specific calculations.

Create balance

While trading can be fun and generate short-term income, it should not be your only source. A diversified portfolio helps reduce overall risk.

Where Should Beginners Start?

Click2Win Streaming: A trial account that’s hard to forget

Click2Win Streaming is a simulated application developed by the stock exchange authority. It’s designed for beginners to practice buying stocks and derivatives. The account is loaded with virtual funds of 10 million (stocks 5 million, derivatives 5 million). With market data that is delayed, this environment provides a trading experience close to real markets without risking actual money.

Summary: Stock trading is an art that must be learned

“Playing” stock trading is not a game of luck but a skill that requires study, practice, and disciplined risk management. Start with the basics, use demo accounts to gain experience, and then gradually increase your capital as confidence grows.

Successful traders generally have good knowledge, accumulated experience, and strictly follow risk management principles. By following these guidelines, trading can become a systematic and sustainable tool for generating additional income.