Getting Your Toes Wet in Stock Trading: (2024)

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Are you ready to virtually walk on Wall Street and into a realm of trading? Or do you cringe with unpleasant memories from math class when you see the numbers and graphs of the stock market?

I’ve been in there and now I am here, sharing some of what I’ve learned with you. But before we dive in, let’s clear the legal air 🙂

Disclaimer: As I am not a certified financial professional yet, I do have a genuine interest in finance and helping others. So this article should not be taken as any legal or professional financial advice. Please seek professional financial advice from a certified financial advisor if you have further questions or advice.

This article includes affiliate links. If you decide you like the service and make a purchase through a link, I may receive a commission at no extra cost to you. As an Amazon Associate I earn from qualifying purchases. Finally, this article has links to further reading resources I personally use.

So in giving credit where credit is due, you have a better understanding of the topics involved. I will not be compensated for your knowledge at these links, I just want you to get the most out of your most important investment…your time.

Now let’s go…

Whether you’re a newbie looking to dip your toes into the financial markets or a seasoned investor, seeking to tickle their trading skills funny bone and provide some valuable insight as a reply below, here are a few essential steps that can point you in the right direction of developing a brilliant strategy for successful trading.

Step 1: Understanding the Basics of Trading

Before diving into all the complexities of trading, it’s important to grasp the fundamentals.

Familiarize yourself with basic key terms like bids, ask, spread, commision, liquidity, stocks, commodities, risk, and reward. For this step, I can refer you to The Bankrate article, Stock Market Basics: 9 Tips for Beginners, or even Pinterest.

The article above by James Royal, Ph. D., gives a basic description of what stocks are, how to invest in them, how the stock market works, as well as highlighting some of the risks and benefits associated with investing.

While you are on the Bankrate site, you might as well poke around and tickle your fancy.

A Google search will give you plenty of choices to click, be careful as not every website has your best interest and may prey on you being a novice. Over the years of my curiosity, I’ve been comfortably guided by sites like Investopedia and The Balance.

After you’ve familiarized yourself with the basic key terms, you can further explore what Fidelity Smart Money shares about trading.

Step 2: Setting Clear Goals and Objectives

The next step is to define your purpose for trading.

Think about it carefully. Write your thoughts out:

• Are you looking to supplement your current income?
• Do you want to develop long-term investments and an investment portfolio?
• Are you looking for a way to add more financial security to your life now and in the future?
• Just looking to flip a couple of dollars?

Or perhaps you just want a better understanding of financial literacy? Establishing clear goals will guide your trading strategy.

Step 3: Choosing the Right Trading Platform

Selecting a reliable trading platform is an important step that should not be entered into lightly.

Familiarize yourself with a few of them and their policies. Don’t just skip over and click yes cause you want it! This is your money, invest wisely.

Much like picking a favorite coffee shop, your trading platform needs to feel right. Apps like Robinhood, Cash App, and Fidelity provide their own services and trading terms. Just throwing it out there, I am not receiving any money from them, just being resourceful and sharing what I have used and found informative.

Step 4: Mastering Risk Management

From my understanding so far at this step, successful traders are adept at managing risks. You have to learn how to set stop-loss orders and calculate position sizes to protect your capital.

Head over here to see what the Investopedia Team has to say about the dynamics of market orders, limit orders, and stop orders. Think of them as your toolkit — you’re going to use them a lot.

Step 5: Exploring a Demo Account: Practice Grows Confidence

Demo accounts offer a risk-free environment to practice and build competence in your trade strategy.

Execute trades, experiment with different strategies, and observe market movements without financial consequences. It’s like having a risk-free playground where you can test your strategies and get comfortable with the platform without risking your hard-earned money.

Step 6: Analyzing Market Trends

After you come back from the playground in Step 5, you should have an understanding of the two main types of analysis: fundamental and technical. You can use this helpful resource from Fidelity.

Use the demo account to apply these analyses in real market conditions. Identify trends, patterns, and key economic indicators.

Take a look and listen to Warren Buffet speak on it here in this video.

Step 7: Building Your Trading Plan

Next, craft a comprehensive trading plan outlining your goals, risk tolerance, and the strategies that you’ve explored in the previous steps. Your plan should act as a roadmap that provides guidance, structure, and confidence to your trading activities.

If you haven’t already, I suggest you reach out to a financial advisor at this step.

Step 8: Transitioning to a Funded Account

Once you’ve confided in a trusted financial professional and gained confidence through a demo account, consider transitioning to a funded account.

Experience the thrill of real trading with actual capital and let the notifications ring of your success!

Accelerate Your Trading Journey with Confidence

Hopefully, by following these steps and some further research on your own, you will soon be ready to embark on a journey towards financial empowerment through trading.

Remember, trading is an ongoing learning process:

Embrace the knowledge gained from demo accounts, refine your strategies, and leap into live trading.

Consult with your investment community for recommendations and reach out for support with every step of the way. Read more about it here.

Ready to accelerate your trading success and hold your own in “trade talks”? Maybe you’ve decided to take it slow and fine-tune your skills on a demo account, either way remember — you’ve got this💪

Let’s talk about it! Questions, stories, or just want to say hi? Drop a line, and let’s build a community of thriving traders together! Happy trading my friends✌