Finances (US)

How to start trading this year? Ultimate guide for beginners

Everyone has already thought about becoming a trader. So, if you want to start trading this year, you should learn how it works first. Read this ultimate guide for beginners, then!

Start trading: step by step for beginners

You can start trading this year. Source: Canva.
You can start trading this year. Source: Canva.

If you want to start trading this year, we’ll show you a complete step-by-step for beginners. You have come to the right place!

In the first place, it is important to say that trading is not for everyone. Each investor profile must be taken into consideration before any type of investment.

Especially when you are considering starting trading, since becoming a trader involves time, money, and a high tolerance for high risks.

Therefore, knowledge is the way to go, whether the type of investment you will make.

Also, this article will mainly gather information about day trading and stocks. But, trading can include a variety of investing ways and securities.

What is day trading and how does it work?

As mentioned before, this article will focus on day trading and stocks, although the tips can fit into a variety of investing ways and assets.

Day trading is one of the riskiest and most difficult investment choices you may take. So, it will be easier to follow the step-by-step below if you decide to go with another type of investment.

To sum up, day trading means trading financial instruments in one single day. Then, you basically start playing when the market opens and finish your game when it closes by the end of the day. 

In essence, it can be really lucrative. But, it is not for short-term profit seekers or those who don’t want to take high risks.

Furthermore, you need to keep in mind you will spend time, effort, and money when trading, especially in the case of day trading.

Now, take a look at the main point you must put into consideration before you start trading when you are a beginner.

How to start trading? Check out the step by step for beginners

You can trade from wherever you are. Source: Canva.
You can trade from wherever you are. Source: Canva.

Firstly, day traders need to seek volatility, liquidity, and volume when looking to buy stocks. 

Secondly, it is crucial to be organized, diligent, objective, and really focused. 

In the case of beginners, choosing the best online broker can be handy. But, still, you must be aware of all.

Becoming an investor requires knowledge, whether trading or saving. So, now, check out the guide for beginners who want to start trading.

1. Plan and analyze your finances

If you want to start trading, the first step you must take is to plan and analyze your finances. If you don’t even have an emergency reserve, it is not recommended to become a trader.

Trading and day trading is risky.

Also, you will probably lose money in the short term.

Thus, before investing, make sure your finances are under control, and your financial structure is solid and healthy.           

2. Study the market and be updated

When it comes to trading, knowledge is a key point, especially regarding day trading.

Then, you must look for the latest stock market information and news, not to mention trading indicators and procedures.

In summary, study the market and be updated to make wise decisions about buying or selling assets.

Pre-approved credit cards for low credit score available now

We analyzed your profile and found some offers that you can apply for today.

You will be redirected to another website

3. Make sure you know your investor profile

Another essential step is to define your investor profile. It will address your risk tolerance, as well.

If your profile sets a low-risk investor, trading is definitely not for you, at least at first.

However, if you have a bold profile, day trading may be a good choice for long-term profit.   

4. Set funds and time to invest

Prepare yourself to start trading. Source: Canva.
Prepare yourself to start trading. Source: Canva.

Of course, after planning your finances, you will be able to set aside funds and time to invest. In essence, trading requires effort, money, and time, even if you have a specialized online broker to help you out.

Therefore, it is important to ensure you have time in your day to track your assets. 

Regarding day trading, it is an even harder job. Basically, it will take almost the whole day for you to spend trading.

Thus, making sure you have the time and money to invest in trading before starting to do it is crucial.

5. Don’t start big! 

The best advice for beginners is to start trading small. It is the right way to do it.

When day trading, consider the maximum of two stocks per session.

Additionally, consider trading fractional shares. This will avoid big losses and minimize risks.

6. Learn about profits in this market and be realistic

As shown, trading and day trading is a risky ways of investing. 

Be realistic, and don’t wait for profit in the short term.

In fact, trading stocks means getting profitable in the long run.  

7. Stay away of Penny Stocks

Although they seem a good deal, penny stocks are illiquid. 

As mentioned before, trading requires you to look for liquidity, volume, and volatility. Then, stay away from those penny stocks!

8. Make use of Limit Orders

A limit order allows you to set the price without execution. So, it can help you with your trading with confidence and more precision.

Although the price isn’t always reached, a limit order can help you avoid losses. 

9. Choose a good broker 

Certainly, a good online broker will be an excellent step when you decide to trade, especially if you are a beginner.

Even though all steps above are crucial, being assisted by a specialized broker will help you save time, effort, and money while avoiding high risks on the way.

Recommendation: 7 financial tips for a fresh start in 2023

As can be seen on this guide for beginners, it is fundamental to start trading after making sure you have your finances under control and a solid and healthy structure.

If you still need to work on that before investing, check out the seven financial tips for a fresh start in 2023!

financial tips start 2023

7 financial tips for a fresh start in 2023

Want to start 2023 on the right foot? Then, check out the list of the 7 best financial tips for you to achieve success in finances.

About the author  /  Aline Augusto

My name is Aline Mesquita; I'm a writer here on the blog, where I write about finance in general and other subjects. I have been working with content creation for ten years. Also, I'm post-graduated in Project Management, with expertise in SEO practices. Currently, I am studying finance, market trends, and cryptocurrencies.

Reviewed by  /  Aline Barbosa

Senior Editor

Trending Topics

content

How to apply for the Earnest Private Student loans?

Earnest Private Student loans are affordable, flexible, and full of benefits. Check out how to apply for one and achieve your future goals!

Keep Reading
content

How to apply for a Merrick Bank Double Your Line Mastercard?

Check out how fast and easy it is to apply for a Merrick Bank Double Your Line Mastercard secured card and reestablish a good credit score.

Keep Reading
content

How to apply for the Citi® / AAdvantage® Platinum Select® World Elite Mastercard?

Looking for a low annual fee card with flight discounts? Read on to apply for the Citi® / AAdvantage® Platinum Select® World Elite Mastercard!

Keep Reading

You may also like

content

Federal loans vs Private Loans: which is better?

College is exciting! But dealing with student loans is not that nice. Read this content to learn if you should go for the Federal Student Loan or for the Private Student Loan.

Keep Reading
content

Citi® Diamond Preferred® Card review: Have a break on interest!

If you need to transfer your balance with ease, and don't want to pay any interest for that, have a look at Citi® Diamond Preferred® Card review, and know how that will be possible. Keep reading!

Keep Reading
content

Navy Federal Visa Signature® Flagship Rewards Review: earn points

If you want to empower your travel spending, don't miss out on our latest review of the Navy Federal Visa Signature® Flagship Rewards.

Keep Reading