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Trading Guide

Learn the fundamentals of trading and master your strategy.

Getting Started with Paper Trading

Paper trading is the practice of simulated trading without risking real money. It's the perfect way to:

  • Learn how markets work without financial risk
  • Test trading strategies before using real capital
  • Build confidence and develop discipline
  • Understand different asset classes and instruments

Basic Trading Concepts

Buy vs Sell

Buy (Long): Purchase an asset expecting its price to rise. Profit when price increases.

Sell (Short): Sell an asset you don't own, expecting price to fall. Profit when price decreases.

Market Orders vs Limit Orders

Market Order: Execute immediately at current market price.

Limit Order: Execute only at your specified price or better.

Stop Loss

An order that automatically closes your position when price reaches a certain level, limiting your losses.

Trading Strategies

Day Trading

Buy and sell within the same day, closing all positions before market close. Requires active monitoring and quick decisions.

Swing Trading

Hold positions for days or weeks to capture medium-term price movements. Less time-intensive than day trading.

Position Trading

Long-term approach holding positions for months or years based on fundamental analysis.

Risk Management

1. Never risk more than 1-2% per trade: Protect your capital by limiting exposure on each position.

2. Use stop losses: Always have an exit plan before entering a trade.

3. Diversify: Don't put all your capital in one asset or sector.

4. Control emotions: Stick to your strategy and avoid impulsive decisions.

5. Keep a trading journal: Track your trades to identify patterns and improve.

Technical Analysis Basics

Support & Resistance: Price levels where assets tend to stop and reverse.

Trend Lines: Connect highs or lows to identify market direction.

Moving Averages: Smooth out price data to identify trends.

RSI (Relative Strength Index): Measures momentum to identify overbought/oversold conditions.

Volume: Confirms price movements and trend strength.

Common Mistakes to Avoid

  • Trading without a plan or strategy
  • Risking too much capital on single trades
  • Letting emotions drive decisions (fear and greed)
  • Overtrading or revenge trading after losses
  • Ignoring risk management principles
  • Not keeping a trading journal
  • Expecting to get rich quick

Ready to Start Trading?

Apply what you've learned with Stoxchain's paper trading platform. Practice risk-free and build your skills!

Start Trading Now