There are 4 things that you need if you want to trade.
It doesn’t matter whether you want to trade stocks or options, forex or futures.
1. You need money. If you want to trade, you do need money to trade.
I personally recommend that you start with $5000 to $10,000. Anything less than that you won’t have much fun, and anything more isn’t needed.
If you can’t make money on a $5,000 or $10,000 account, why do you think that you’ll make money on a $100,000 account? Start small and grow big.
2. You need a strategy. You do need a trading strategy that tells you exactly what to trade, when to enter, and when to exit. When to exit with a loss. And also, when to exit with a profit.
3. Based on the trading strategy, you will need a charting software.
A charting software is your window to the markets. It basically shows you what the markets are doing right now and shows it in the form of a chart. It can be a bar chart or a candlestick chart. It doesn’t really matter.
You’ll need this especially when you use indicators, which is what I personally like to do. When you use indicators, you need a charting software that plots the indicators so that you know exactly when to enter.
If you’ve been following me for a while you know the 3 indicators that I like to use are RSI, Stochastics, and MACD.
Instead of using just any charting software, I use my own, The PowerX Analyzer because it makes it really easy for me to know exactly what to trade, when to enter, and when to exit.
4. You need a broker.
Eventually, if you want to place the trades, you need to place them through a broker.
The only financial instrument that allows you to place trades directly with the exchange are binary options at NATEX, the North American Derivatives Exchange.
Everything else, whether you want to trade stocks on the Nasdaq, or you want to trade stocks on the New York Stock Exchange, or you want to trade futures, you need a broker.
There’s many choices of brokerages out there that you can use to place the trades. Probably the biggest brokerage out there is TD Ameritrade. What I personally use is Interactive Brokers. There’s also Robin Hood and E-Trade.
So in summary, what are the 4 things that you need to trade?
- You do need money
- You need a trading strategy that tells you exactly what to trade, when to enter, and when to exit
- You need a charting software
- You need a broker to place the trades
Hope this helps. Leave a comment below and let me know if there’s anything you would like me to talk about and cover.