Table of Contents
Most people who are interested in online trading are looking for ways to get better at it. Let’s explore how you can become a better trader!
Start with an Online Course
There are plenty of books, articles and tutorials that will teach you the basics of trading. If you are looking for tutorials, there are plenty of great ones available online. Just make sure to do your research and find a course that is right for you. If you know anyone who trades, ask them for advice.
Investopedia recommends the following 6 resources for online trading education.
- Best Overall: Investors Underground
- Best for Newbies: Udemy
- Best Comprehensive Offering: Warrior Trading
- Best Free Option: TD Ameritrade
- Best Value: Bear Bull Traders
- Best for Live Training: Bulls on Wall Street
Investopedia also has its own Online Academy, currently offered at $199 for lifetime access.
There are plenty of books, articles and tutorials that will teach you the basics of trading. If you are looking for tutorials, there are plenty of great ones available online. Just make sure to do your research and find a course that is right for you. If you know anyone who trades, ask them for advice.
Investopedia recommends the following 6 resources for online trading education.
- Best Overall: Investors Underground
- Best for Newbies: Udemy
- Best Comprehensive Offering: Warrior Trading
- Best Free Option: TD Ameritrade
- Best Value: Bear Bull Traders
- Best for Live Training: Bulls on Wall Street
Investopedia also has its own Online Academy, currently offered at $199 for lifetime access.
Choose a Broker
A broker acts as a middleman by purchasing and selling stocks on your behalf.
Look for a reputable broker who offers low commissions and fees, an easy-to-use platform, and tools and resources to help you make better trades.
NerdWallet rounded up recommendations for online brokers. All of their recommended brokers offer free trades or $0.01 trades, and most don’t require any minimum account balance. Their recommendations are:
- Merrill Edge
- Fidelity
- TD Ameritrade
- E*Trade
- Interactive Brokers IBKB Lite
- Webull
- Ally Invest
- TradeStation
- Zacks Trade
- Firstrade
- Charles Schwab
A broker acts as a middleman by purchasing and selling stocks on your behalf.
Look for a reputable broker who offers low commissions and fees, an easy-to-use platform, and tools and resources to help you make better trades.
NerdWallet rounded up recommendations for online brokers. All of their recommended brokers offer free trades or $0.01 trades, and most don’t require any minimum account balance. Their recommendations are:
Open a Trading Account
Opening an online brokerage account is usually easy. You just need to fill out an application, verify your identity, deposit funds, and wait a few days for your funds to finish processing.
Many brokers will allow you to open a demo account to make practice trades. This is an excellent way to test new ideas and see what works before risking real money. You can also use a free stock market simulator from Investopedia, MarketWatch, Wall Street Survivor, or HowTheMarketWorks.com.
A demo account can also be a valuable tool for experienced traders. If you are planning to make major changes to your trading strategy, test them out with a demo account. This way, you can see how these trades would have performed in real-world conditions.
The market is always changing. What worked yesterday may not work today, so it’s important to stay flexible and be willing to change your strategies as needed. The only way to do this is by constantly practicing and testing different approaches.
Learn to Analyze Financial Markets
To learn online trading, you need to understand how to analyze financial markets. There are a few key things that you should look for when trying to determine the direction of the market.
First, identify the overall trend. Is the market moving up, down, or sideways? There are different trading strategies for each type of market.
Once you have identified the market’s direction, look for support and resistance levels. These are areas where the market has a tendency to reverse direction. By identifying these levels, you can better determine when to enter and exit trades.
Another important factor to consider when analyzing financial markets is the news. Economic data releases can impact the market’s direction. Pay attention to any news that could affect the markets you are trading, and always remember to prepare for anything.
Begin with a Small Investment
When you are starting to learn online trading, start with a small amount of capital. Starting small will help you minimize risk while you’re still learning. Once you have a good understanding of how online trading works, you can then increase your capital as you become more confident in your ability to trade successfully.
Another important thing to remember when you are learning online trading is to keep your emotions in check. Do not let greed or fear dictate your decisions. Instead, base your trades on sound analysis and research, not “your gut”. This will help you minimize your losses and maximize your profits.
Lastly, always remember to practice risk management. Consider how much you can afford to lose on a trade. Understand what threats exist in different industries including legal liabilities, technology issues, management problems, natural disasters, government regulation, international trade limitations, even inflation risk. The most common approach to manage risk is to diversify your investment portfolio and match your investments with your goals, all with consideration to the time horizon for your investments.
Start Using Leverage
As you become more familiar with online trading, you can begin to take on more risks. You may also want to consider using leverage to increase your potential profits. Leverage is when you borrow money from your broker to make a trade.
While leverage can increase your profits, it also increases your risk of losing money. You should only use leverage if you are confident in your ability to make profitable trades and you can afford to cover your losses.
When you are ready to start using leverage, you will need to open a margin account with your broker. This type of account allows you to borrow money from your broker. You will be required to maintain a minimum balance in your account, and you will be responsible for any losses that exceed this amount.
If you are new to online trading, it is important to start with a small amount of money. You can increase your leverage as you become more comfortable with the process. Remember to use leverage wisely and always be aware of the risks involved.
Have a Trading Plan
When you’re first starting out in the online trading world, it’s important to have a plan. This will help you become better at what you’re doing and avoid making common mistakes. A trading plan can also keep you from getting overwhelmed by all of the information and choices available.
There are a few things that you should consider when creating your trading plan.
First, you need to decide what type of trader you want to be. There are two basic types of traders: short-term and long-term.
Short-term traders focus on making quick profits from small price movements. Short term traders often practice swing trading – a trading strategy that entails maintaining positions for a few hours, a few days, or a few weeks in order to profit from the market’s transient price changes. VectorVest provides real-time market data and alerts to help you monitor your trades and adjust your strategy as needed.
Long-term traders, on the other hand, are more interested in making larger profits over a longer period of time. They tend to hold their positions for weeks, months, or years.
Once you’ve decided what type of trader you want to be, you need to set goals.
- What do you hope to achieve through trading?
- Do you want to make a certain amount of money?
- Do you want to learn how to trade successfully so that you can quit your day job?
Make sure your goals are realistic and achievable. After you’ve set some goals, you need to choose how much time you want to dedicate to trading each day or each week.
Get an Accountability Partner
When you’re learning how to get better at online trading, it’s important to have an accountability partner. This is someone who will provide helpful feedback and advice, and make sure you’re following your plan. Having someone hold you accountable will help you stay focused and motivated.
There are a few things to consider when choosing an accountability partner. First, you need to make sure they’re someone you can trust. This person will be privy to your trading plan and strategy, so you need to make sure they’re someone you feel comfortable sharing this information with. Second, you need to make sure they’re someone who is knowledgeable about trading. They don’t need to be an expert, but they should have a good understanding of the market and how it works. Finally, you need to make sure they’re supportive and willing to help you stay on track.