First Steps To Start Trading Stocks
Here you will learn what is needed to be done in order to start trading stocks,
before you are even able to complete your first real trade.
If you want to know how to start trading stocks but do not know where to begin, do not worry because every stock trader was in the exact same position as you. There is a lot of information you need to know before you make for first trade, but do not be scared.
First you need to know what type of investing you intend to be doing. Many people want to be day traders, but only a small percentage actually succeed. Then there is swing trading, which means you enter and exit a trade within about a week or two. Then the safer route is traditional investing where you park your money in a solid company and watch it grow slowly. If you have a full time job, then the latter is probably your best bet. If you want to become a full time trader, then you should really take some courses and find some mentors who have experience with trading.
Once you figure out the type of investing style you will be doing, you need to choose a broker that suits your needs. There are many different brokers that offer different fees for making trades. Some are good for day trading and some are good for long term investing. Some brokers offer low fees per trade, and some brokers have no fees per trade but they take a small commission of your holding.
If you live in the USA you also have to worry about the PDT rule which is called the Pattern Day Trade rule. This means you are only allowed to make 3 trades per week unless you keep a balance of at least $25,000 in your trading account. There are some brokers you could sign up for that do not have the PDT rule, like SureTrader. They have a low fees, but they are located in the Bahamas, so it can be confusing and a hassle to deposit and withdraw money, plus you have no protection if they go bankrupt.
Deciding on a broker does not mean you are ready to start trading, it just means you are getting prepared. The next step is to start practice trading, which is also called “paper trading”. There many different websites and programs that offer paper trading on the internet, and they are all very different. Some kind of seem like computer video games, and some are just as real as actual stock trading platforms. I would suggest to start paper trading with a program that is as real as possible, that way you can get a good grasp for the actual thing when you are ready. Many brokers will also include practice accounts when you open a traditional trading account, so make sure you do your research.
After you have done these steps you might think you are ready to start actually trading, but trust me, you are not. I would advise you to consult with some experienced traders, or look into a stock trading community that also provides a stock trading chatroom. The most quality ones usually charge money, but you are able to surround yourself with professionals and absorb their years of experience. A few hundred dollars is a drop in the bucket compared to the time and money you can lose by trying to wing on by yourself.
One trading community I would suggest that is very fair in pricing and has many services is WWW.THETRADINGNATION.COM they offer trading alerts that have a very good success rate, and their trading chatroom feels very cozy and relaxed. Anytime you have a question or concern, an admin or experience trader is there to answer your question right away, definitely the best bang for your buck.
Now once you have all this in place, and you have been paper trading for at least 3 months, you can officially begin you first real trade, but always do your research. This is also why it is good to join a trading community like www.thetradingnation.com, because you can see what other traders are looking at and get advice from multiple people. This will make your odds better at becoming a successful day trader.