Image by TravelAficionado
Today more people than ever not only want to but do trade stocks. Everyone has this idea in their head that you can became rich overnight, trading. I know this because thats what I thought and the reason why I started trading. I have been trading for nearly two years now and I learn new things everyday. As a matter of fact the thing that I enjoy the most about trading is the learning.
When I first started looking into stocks everything seemed in a foreign language to me. After hundreds of hours in research, self study, and experience I finally begun to understand. Now as I read, I literary visualize charts moving up and down and I find it easier to grasp the new strategies being explained. Learning new things is a fun/never-ending process. Anyways, enough random talk. The reason why I am writing this article is because a lot of people ask me about how to get started. This is step by step what you have to do before you begin trading.
Step 1 : Open a brokerage account
A brokerage account allows you to buy and sell stocks. The registering process is no different that opening a banking account. Every major bank has their own online trading platform and you can go to your branch to open an account. I would however suggest to do your research about which brokerage in your zone has the cheapest trading fee. I trade with CIBC bank and pay a fixed fee of $6.95 per trade. I also trade with Questrade and in there I pay between $4.99-$9.99.
P.S. I would suggest opening a TFSA trading account because you don’t have to pay taxes on your capital gains. On a non-registered trading account you have to pay taxes on 50% of your capital gains, which is still pretty good if you ask me.
Step 2 : Decide what kind of trader you wha to be.
Are you a day trader? Swing trader? or are you simply just an investor? What is your risk level like? Are you the type of person who likes to be safe or the kind of person who likes to live life on the edge?
Many people put money in blindly or rush into a decision only to lose it all. Yes, all. You can lose ALL your money and than some, if you use margin. (Will explain that in other articles but basically borrowing money to invest) DONT RUSH. The market will be there tomorrow.
Step 3: Do your research.
Now that you are all set up and ready to trade you have to begin and research. No you will not became an expert overnight, nor will you became an expert in 1 year, and most likely you will not listen until you make the mistake in your own but YOU HAVE TO DO YOUR RESEARCH. Research the company, the industry and monitor the stock.
Step 4: Have a plan.
Have a plan and stick with it. Do not get emotional. Know at what price you are going to sell and at what price you are going to buy. Decide when you cut your loses or cash in your profits.
Step 5: Research.
Step 6: Learn .
Step 7: Adapt .
Step 8: Repeat step 5-8.
This should give you an idea in the initial steps on getting started in the stock market. I will expand on the topic and write articles as ofter as I can.
One last advice that I will give you is not to procrastinate. The research is available to you more than ever and it is up to you to make use of it. If you don’t have money you can still learn .That doesn’t cost you anything You can also trade fake money as part of your learning process. No excuses. Those who make excuses stay poor their whole life.