Online trading has skyrocketed in popularity as a way to make a flexible, full time income or as a lucrative part time side hustle. Whether you’re brand new to trading or just want a refresher of the fundamentals then this article will show you the best ways to start trading stocks online – the perfect investment vehicle for beginners and experienced traders alike.
Best Ways To Start Trading Stocks
If you want to start trading stocks and need a whistle-stop tour of things to be aware of before investing your own cash, you should focus on the four points below. I’ve based these on my experience as a copy trader and years of reviewing trading platforms. I have been in your position and have learned what it takes to make regular monthly returns.
- Choose a reliable online broker
- Select the right trading strategy based on time available to trade and attitude to risk
- Educate and familiarise yourself with the markets you want to trade in
- Stick to your plan and give it time to work
Via Trade Wise, I aim to test and review trading platforms and services so that I can recommend the most profitable and useful tools for investors like you to use. This means that even novice traders can start buying and selling stocks in no time – safe in the knowledge that the trading resources they’re using are tried and tested by successful traders before them.
When learning a new hobby or skill, most of us tend to dive right in and hope for the best. This approach is perfectly acceptable when learning to roller skate or dabbling with a paintbrush, but when it comes to trading stocks and investing your own hard earned cash, then you might prefer a more measured approach to learning the ropes – and this is where Trade Wise comes in.
Read on for my tips on choosing the best trading plan for you, choosing the right trading platforms, minimising trading losses and taking control of your earning potential from the comfort of your own home, without the need for 5 screens and millions in the bank!
A Brief Introduction To Trading Stocks
To start trading stocks you need to get familiar with what the stock market is and how it actually works.
- In its simplest form the stock market is a big auction house where people can buy and sell investments (also referred to as stocks) via a stock exchange in the hope of making a profit on their initial investment.
- Stocks are small shares of ownership in public companies that can be bought and sold between traders.
- The price that stocks are traded for is determined by market sentiment, company performance, and of course supply and demand at any given time.
- Stock traders connect via a stock market and some of the most common stock markets include the FTSE 100 or Dow Jones Industrial Average or the S&P 500.
- Market Indexes are groups of investments that represent a segment of the market. A market index price gives traders a snapshot of a given market’s performance which is useful because it would be impossible to track every individual stock available!
I briefly touched on my four point plan outlining the best ways to start trading stocks in the introduction above. Now that I have covered the basics of the stock market, i’ll expand further on each point to get you on your way to making successful, profitable trades in no time!
Choose A Reliable Online Broker
Your choice of online broker is an important decision that you should take your time to get right. Your broker is essentially your gateway to trading stocks and is the individual or company that you’ll open your trading account with. A broker is licensed to trade via the stock exchange and provides you, the trader with the software you need to access the markets you want to invest in.
You should make sure your online broker has a perfect regulatory record and should also pay attention to the likely charges you will incur for their service. Charges to look out for include fees for trading commission, withdrawing balances and account subscriptions. For an extra layer of protection you can check what other customers have to say about them and always ensure your broker is fully regulated and conducts trades using secure technology.
My recommendations for great online brokers include top trading sites like Gorilla Trades and others which I have noted below. Take a look at my review of Gorilla Trades here.
- Fidelity Investments
- TD Ameritrade
- Interactive Brokers
- Advanced Traders
- Interactive Brokers
- Charles Schwab
For more insight on the pros and cons of each, I’d be happy to share my experience of each platform – just use the contact form to say hello!
Select The Right Trading Strategy For You
Every trader needs a plan if they want to stand a chance of trading successfully. That plan is known as a trading strategy and it should clearly define the type of investing that you want to engage in. This decision will be heavily influenced by how much time you have to dedicate to trading and your attitude to risk.
Your trading strategy should also set out your objectives for trading. For example, do you want to make a bit of cash for nice holidays or are you looking for long term returns for a comfortable retirement. Factors like these will help you make the decisions that bring you closer to your goal of making money when trading stocks.
Having a trading plan to refer to helps you to stay on track when placing trades or choosing which traders to copy trade. It is also an excellent way to stay focused on the big picture so that you know how to react if things don’t go as expected and to prevent you from getting carried away in the heat of the moment, which can all help to prevent unnecessary losses.
Is Copy Trading The Route For You?
When starting out, copy trading can be a brilliant way to bring your trading strategy to life. By choosing to follow an experienced trader’s movements via a trading signal, you can reap the rewards of another trader’s knowledge of the stock market whilst reducing the steep learning curve involved in making your own trades.
There are plenty of copy trading platform providers to choose from including ones where you can copy multiple traders in one account such as eToro and Zulutrade. Others offer a completely automated platform such as Yieldnodes, where you deposit funds and everything else is taken care of for you. Finally there are copy trading services that send out signals for you to action yourself such as Gorilla Trades.
Knowing which trader to follow and which copy trading platform to use comes down to the type of investing that you want to do.
Choosing your investment style
When using broker sites like Gorilla Trades, which is a stock signals service with a strong following, you need to pick your style of investing. Investing styles can broadly be split into three categories; stock trading, active trading or day trading.
- Stock Trading prioritises short-term revenues over long-term profits but can be tricky to master as a novice.
- Active Trading is where you place ten or more trades per month. Some investors use this to take the short term events where they can turn a profit in the coming weeks or months.
- Day Trading is a full time job in itself and aims to make money by buying and selling hundreds of times within a single trading day.
Learn The Markets You Want To Trade In
Learning any new skill takes time but you can make it much easier for yourself by learning from experienced, successful investors that have already made the mistakes you’re hoping to avoid! This is exactly the service I offer here at Trade Wise which is why I only recommend trusted and reputable trading tools that we have tried and tested with success myself..
Whether you decide to copy trade or want to make your own trading decisions, it pays to learn as much about the markets that you plan to trade in as possible. You should pay attention to the variables that are likely to impact the trades you make such as market fluctuations, company performance and any known market cycles so you know when to buy or sell, and whether it’s likely to pay off or not.
Stick To Your Plan And Give It Time To Work!
We’ve spoken about making a trading plan, and now I must tell you to have confidence in your plan even when this feels like it’s not working!
There are plenty of losses and gains when trading so you have to be able to take the rough with the smooth as it’s inevitable that you will lose money at some point. The point to note is that you must be consistent with your trading strategy. Don’t ditch it at the first sign of loss and don’t change tact every time something goes wrong.
You need to give your plan time to work and depending on your investment goals, this could take place over several months or several years. Pay attention to the short term fluctuations but keep the end goal insight. Of course you can tweak your plan when required but only do this after you have given it enough time to work and for your trading knowledge to evolve.
If you want to test your strategy before putting your money where your mouth is, then there are plenty of trading simulators available that allow you to make trades using historical market data to see how they would have panned out in the real world. This is a great way to build confidence in trading stocks for beginners.
Can I Copy Trade In The Stock Market?
Copy trading is an automated investment method that allows you to mimic everything another trader does, including their open positions, holds, strategy and trades. All you have to do is choose an investor to follow and make sure there is enough money in your trading account. Copy trading exists in all major markets including the stock market.
Due to the unpredictable and risky nature of all investments, copy trading can be a good option for beginners that want to benefit from the experience of seasoned traders whilst doing very little themselves in the hope of making a return on their investment. .
Most trading platforms offer a signal service that can be followed but the key to successful copy trading is to follow a trader whose investment style and goals align with yours. For example, if you are a conservative investor that wants to see long term investment growth over ten years, don’t follow a day trader that is focused on rapid, short term daily profits.
I hope this article has given you plenty to consider when it comes to the best way to start trading stocks. It’s important to remember that every successful trader has to start somewhere but not all starting points are equal.
You can get ahead of the trading game by learning how to copy trade and using recommended and reliable trading platforms like the ones recommended throughout the Trade Wise site.
Learning from traders that have been there and got the t-shirt when it comes to trading is a great way to get up and running with stocks and shares as quickly as possible whilst minimising the time, effort and money you stand to lose from going it alone.
If you’re ready to start trading stocks, remember to focus on the four points below for the best chance of success.
- Choose a reliable online broker
- Select the right trading strategy for you based on your time and attitude to risk
- Educate and familiarise yourself with the markets you want to trade in
- Stick to your plan and give it time to work!
Whatever route you take into online trading, I encourage you to enjoy the process, because trading stocks can be great fun, especially if you don’t mind an emotional roller-coaster as the markets go up and down!
If you have any questions about the best brokers and copy trading platforms to use, or even what not to do, then please contact me here at Trade Wise or subscribe to the mailing list. To learn more about different market orders, investment strategy, and stocks trading, take a look at Gorilla Trades and click here to see which three trading services that I rate the most highly to get you on your way to trading stocks like a pro.
Jon Platts runs Trade Wise and has been testing trading products and services for over ten years. He shares his knowledge of what works and what doesn’t with new traders looking to enter the exciting but often baffling world of investing and copy trading. He hopes that by sharing his experience and reviews, investors can easily find trusted platforms where high returns can be achieved without making the same costly mistakes that he did when starting out!
I’m Jon, owner of Trade Wise at https://tradewise.community/ and https://www.youtube.com/channel/UC7VmOx8DbvX4Rbrac2pPcjw
I review forex and crypto trading products and services to find the best of what’s out there for creating a passive income without becoming a full-time trader.