While people come into trading for a wide variety reasons and from an equally broad range of backgrounds, there are some common issues that all new traders face.
This leads to the existence of a few common new trader questions that everyone new to trading tends to ask.
Everyone’s journey to trading success will be different, but there is some core starting advice that every new trader should follow. Here are the top 3 questions that new traders have and their answers.
How Do I Start?
The first few steps into trading are definitely the hardest. The amount of information and possibilities in contemporary finance are staggering, and someone without a plan will quickly find themselves lost in a dizzying maze of complex and often conflicting ideas and opinions.
Before a new trader does anything else, they should take a trading course to learn the basics and help them find their way in the massive and complex contemporary markets.
Trading courses will help you plant your feet firmly on a solid base of fundamental and universal trading knowledge, which you can then use to go out and explore the markets for yourself to discover your own personal niche and area of expertise.
Once you have taken a trading course, it is time to download a trading platform demo and begin testing your ideas. You will need to refine your trading strategies for a decent amount of time before they are ready to face the challenges of live trading, and most trading platforms offer demo versions that perform exactly like the real thing.
How Much Money Do I Need?
According to US regulations you will need at least $25,000 to day trade using an American based broker. This may seem like a lot of money, but you should remember that you are investing it, not spending it, and the intention is to make safe trades that generally increase your capital as opposed to drawing it down.
For those traders who do not have $25,000, you can start an account with TradeZero or Suretrader for as little a $1,000, as these brokers are not based in the US and not subject to US day trading regulations.
The more money you start with the better off you will be, as it is absolute returns that you are going for. The larger your starting pool of capital, the larger your returns will be and the more cushion you will have for draw downs.
Which Broker Should I Use?
Contemporary retail traders have access to some of the most advanced and sophisticated trading platforms available today. These platforms offer the full range of execution types, asset classes and technical tools.
Interactive Brokers is widely considered to be the top choice for the serious retail trader, and is also the platform of choice for many smaller institutional traders as well (and by ‘smaller’ we mean funds of between $10 million and $100 million).
Lightspeed is also a very popular choice among day traders due to its ideal configuration for quickly executing day trades and is one that we highly recommend. However, there is a $10,000 minimum deposit to open an account with them.
Finally there is TradeZero for those who cannot meet the minimum capital requirements of Interactive Brokers and Lightspeed, which also offers a competitive platform that allows for the execution of the most sophisticated trading strategies.
A Solid Foundation for Future Success
The answers to the 3 top new trader questions are a great starting point to get started in the exciting and rewarding world of day trading.
Sign up for an online trading course today, and you will be well on your way to the professional success and financial freedom that you have always dreamed of.