When entering the market, new investors must start by learning the basics. Researching quality education from multiple sources is key to success. Just like learning a sport or riding a bike, it takes trial and error with the desire to stay motivated to become a successful trader. For those wanting to take their first steps, we offer the simple way to start trading like the pros.
What is an Investment?
You definitely know the word investment, but do you know what it actually means?
Ironically, the word investment has become kind of misunderstood because the word is so overused. People might refer to “investing” in a sofa, for instance.
The easiest way to define it is that an investment is a situation where you give a person or an entity some of your money in exchange for potential profits. Potential is the key here: profits are not guaranteed.
Investments come in different shapes and sizes.
Find a Broker
Stock brokers are like real-estate agents. They know all the rules regarding trading, how to execute trades, and what the SEC requires. Consequently, they’re qualified to make trades on the stock market, whereas people like you and me are not.
Many stock brokers work for large brokerage houses or agencies. Others work for individuals or on Wall Street.
There are many online brokers that offer a wide variety of free trading tools. Research the one suitable to your needs and open an account. Navigate the platform and look for any videos or training that will help get you familiar with the software. We urge new traders to choose a broker that offers virtual / paper trading, as you can learn and trade at real time, with no risk.
How to Open a Brokerage Account
In most cases, traders can open brokerage accounts in minutes by filling out an online application.
Let’s use TD Ameritrade as our example again: If you open an account with TD Ameritrade, they’ll ask you what type you want. You select Brokerage. Then you decide whether you want to open it by yourself, jointly with someone else, as a custodian, or in some other manner. Many traders open solo accounts, or joint accounts with their spouses.
Then you’ll fill out some basic information: your name, address, phone number, and so on.
The next screen will ask for some personal information about you, like your date of birth, social security number, marital status, how many dependents you have, what you do for a living, your annual income, your liquid net worth, and total net worth.
That sounds like a lot of information, but your broker uses it to set up your account properly and make sure you’re a good candidate for the account — so make sure you’re honest and accurate.
You’ll then be asked to fill out your investment profile. Some want to know your trading goals, investment experience, and your level of options investment knowledge. Additionally, you’ll tell TD Ameritrade how you plan to fund your account.
From there, it’s simply a matter of funding the account and getting used to the system.
Go to Workshops
Workshops can offer valuable education that focuses on key aspects within the market. Many workshops will have a speaker that focuses on specific strategies that has found them success over the years. Most workshops will have a price tag, but you may get lucky and find a free workshop/class that could be beneficial. For most new traders, you can either lose money in the stock market, or pay for education to make strategic decisions that will improve over time.
Study Study Study
Be diligent and put in the effort to increase your knowledge and continuously improve your skills. Learn chart patterns and be engaged in social groups and chatrooms. Learn from others but be cautious with the information you receive.
Learn From a Mentor
If you’re ready to take your trading to the next level, it’s vital to seek out a trading education. It’s an investment of time, but will reduce your learning curve and make you a stronger trader. Mentors are one of the most recommended way to be exposed to the stock market. A mentor can be a friend, family member, or a known trader with a good track record of success. A valuable mentor is willing to help when needed, recommend useful resources, and inspire you to be maintain a strong mentality. All successful traders have had mentors in the early trading days.
Where Should I Invest Money to Get Good Returns?
That’s the universal question, isn’t it? Figuring out how to identify the best investment to reach your goals can be intimidating, and there isn’t a clear-cut answer.
The good news is that none of the aforementioned investment types are generally considered bad ideas. But in terms of delivering “good” returns, that depends on your individual constitution, goals, and risk tolerance.
Plenty of people will start with lower-risk investments. While the returns are lower, they’re also a lot less scary.
The risk level is higher, but so are the potential returns. This is why low-priced stocks are what I focus on in my career and in my teachings.
Perfect Your Strategy
Learn the various ways of trading and focus on the style that suits you. (Day Trading, Swing Trading, Options, Short Selling)
In day trading, you hold your positions for only a very short period of time. It could be minutes or hours, but it won’t be more than a day. Hence the name day trading.
Another related style of trading is swing trading. In swing trading, you hold on to your position longer, it might be a few days or even several months.
Percentages Trading usually does both, depending on what the market dictates based on fundamental research and examining the stock’s chart patterns.
Getting started as a day trader is very simple. All you need is a computer, an internet connection, and a brokerage account. Even if you have a small account, brokers like TD Ameritrade and E-Trade allow you to get started with amounts of even $500 or less.
Options trading can deepen and diversify your trading repertoire. However, options can quickly become complicated with the many different…well, options available.
Like any other sector of trading, it’s important to seek out an education before you attempt to invest in this way.
Set Investment Goals! How to Make $5K Month
I teach our members what I’ve learned over my years in the market so they don’t have to make the same mistakes I did. I want them to buck the odds and succeed as day traders, as opposed to the 90% of day traders who fail trying to do it on their own.
Join other traders on the right path to making money in the stock market. We invite all new traders to learn our, “How To Make $5,000 a Month”, strategy and become a member of Percentages Trading Clubroom!