How To Start Trading Stocks Online 2019 – Step by Step Guide
Have you ever wondered if it is really possible to make money with stocks?
And how do you do it?
How do you start trading stocks?
In this article, I’ll show you a step-by-step guide on how to get started.
Before we get started, let me tell you a quick story:
In 2001, I had a corporate job. I was working for IBM.
And I did what most people do: Get up early, sit in traffic while driving to the office, follow the rules, be a good worker, and try to save money for retirement.
To be honest, I wasn’t very good at the “saving part:” I made money, and I spent it. It seems that by the end of the months there wasn’t much money left!
I thought to myself: “There must be an easier way to make money!”
And I was always fascinated by the stock market. I looked at a chart of the Dow Jones, and I realized that it had QUADRUPLED in the past 10 years! The Dow went from 2,500 to 11,000!
I could not only DOUBLE my money… I could QUADRUPLE it – and maybe even more.
That’s when I decided to get serious about trading stocks.
The question was…
How To Start Trading Stocks
Making the decision to start trading stocks was easy.
But I had many questions:
- What software do I need?
- How do I open a trading account?
- What broker should I use?
- How do I pick the best stocks to trade?
- When do I enter?
- And how long do I hold the stock?
- When should I take profits?
- And what happens if the stock goes down?
- Will I lose all of my money, or can I limit my losses?
I started my quest, and I made a lot of stupid mistakes that cost me a lot of money!
One of the worst mistakes that I made was listening to a broker. That cost me $25,000! But that’s a story for another day.
Right now, I want to share with you …
How To Start Trading Stocks In 5 Steps
Step 1: Decide What To Trade
You can trade stocks, options, currencies (a.k.a. Forex), Futures, Cryptocurrencies (e.g. Bitcoin), ETFs, penny stocks…. The list of possibilities is long – and confusing!
Here’s what I suggest: Learn how to trade stocks first, because it’s the easiest way to get started.
Once you know how to trade stocks, it’s easy to learn how to trade options, ETFs and even futures.
Don’t let others confuse you!
Some people will tell you that you should start trading options. Some people will tell you that you should start trading Forex. Some people will tell you that NOW is the best time to trade cryptocurrencies.
And they all will have a compelling argument for it. Most of the time they will tell you:
- You can start with as little as $500
- Your risk is limited but your reward is unlimited.
- You can double, triple and quadruple your money in a very short amount of time.
Don’t fall for these “promises.”
Keep THIS in mind: The fastest way to lose all your money is trying to double it quickly.
Learn how to trade stocks, and once you start making money with stocks, you can always add options, ETFs, futures and maybe even currencies to the mix.
Step 2: Get a Trading Strategy
This is EXTREMELY important! And I have learned that the hard way.
At the beginning of my trading career, I did not have a trading strategy.
Here’s what I did instead:
- I listened to the news
- I followed “gurus” and their advice
- I bought stocks based on my opinion.
All these approached made me lose money.
I realized that I need to have a super solid trading strategy that does the following:
- Rules that show me EXACTLY what stock to trade (no more opinions, neither from me nor from gurus!),
- Rules that tell me EXACTLY when to buy the stock, and
- Rules that tell me EXACTLY when to sell the stock, either with a profit or with a loss.
So I started learning about trading indicators because they are easy to use, reliable, and accurate.
By the way, if you are interested in the trading strategy that I personally use, how I use these indicators, then go to myTradingRountine.com. That’s a website that I built that shows you exactly how I find the best stocks to trade, how I make my decision when to BUY the stock and how I limit my risk.
But let’s move on to the next step:
Step 3: Practice on a Demo Account
Here’s another BIG MISTAKE that I made:
When I was new to trading, I was so excited that I wanted to start right away!
After all, I took the time to develop a trading strategy, and now I wanted to make money.
So I started trading with real money – and LOST money because I made mistakes.
And that’s normal!
When you start something new, you will make mistakes.
Here are some of the mistake that I made when I started:
- I BOUGHT when I was trying to SELL
- I traded 1,000 shares instead of 100 shares
- I bought at 33.03 instead of 30.33
- I bought AM instead of AMD
… and many, many more stupid things!
I’m sure you’re much smarter than me, and yet:
Practice on a demo account first – for 2 reasons:
- Make as many mistakes as you can when you trade “paper money”
- Prove to yourself that your trading strategy actually works!
I recommend at least 40 trades. This way, you get statistically significant results AND you have a chance to make at least 5 mistakes!
After practicing on a demo account, you’re then ready for the next step:
Step 4: Open an Account With a Broker
This is actually the easy part, and here’s why:
Since October 2019, most brokers no longer charge any commissions!
Previously, you had to compare different brokers and decide whether you want to pay more commission and better support, or few commissions and no support.
But that has changed: These days, all major brokerages offer ZERO COMMISSION trading.
So just pick a broker, go to their website and open an account. It’s quick and easy and won’t take you more than 10 minutes.
Here are some great stock trading brokers:
- TD Ameritrade
- Charles Schwab
- Interactive Brokers
Your account will be ready to trade in 1-2 days.
So let’s move on to the last step:
Step 5: Start Small, Grow Big
Don’t risk the bank on your first trade!
Try to make $100. Then do that again.
Prove to yourself that you can make $50, or $100 before risking more.
Think about it: How do we learn to drive a car?
When my son Julius was 15, we went to the school parking lot and drove around – at 15mph. And he still hit the curb! – lol
Once he got some practice – and better – we went to a quiet neighborhood with a speed limit of 25mph. And he was white-knuckling it!
But after some practice, we went to a neighborhood with a speed limit of 35mph.
You get the idea: We slowly but surely increased the speed and the difficulty. It took us weeks, but then he “got it” – and now he’s a really good and safe driver.
Can you imagine what would have happened if we went straight to a busy Interstate during rush hour for his first driving lesson? It would have been a disaster.
Same with your trading account.
If you can’t make money with a $10,000 account, you won’t be able to make money with a $100,000 account.
So start small and grow big.
Now you know the 5 steps on how to start trading stocks.
For most people, Step #2 “Finding a proven trading strategy” is the most difficult step.
So let me make it easy for you:
If you would like to know how I personally trade, how I find the best stocks to trade, when to enter and when to exit, then go to myTradingRoutine.com and watch the video in which I explain everything in detail.
Good luck, and let me know if you have any questions.