Learn How to Trade Stocks: Ultimate Guide for Beginners

This market is one of the hottest ever, and it’s a great time to learn how to trade stocks.

The action’s been crazy! Stocks making moves of 500% or 1,000% in one day…

Of course, not every stock will see this kind of action every day. But these moves show the power of this market and the potential that’s out there.

This post is a guide to help you learn how you can trade these powerful moves. Let’s get to it!

Learn How to Trade Stocks: What You Need to Know Before You Start

Stock trading is one of the easiest or hardest careers out there depending on who you ask.

I mean, sitting pushing ‘buy’ and ‘sell’ buttons all day sounds simple. But if that’s all you do, you’re only gambling.

Stock trading the right way is more complex. It won’t be something you’ll learn in a day, week, or month.

The first thing you need to do is acknowledge the challenge you’re facing. This takes work. But nothing worth doing ever comes easy.  

If you can stick with it, it can be worth the effort.

How Do Beginners Trade Stocks?

As a beginner, you’ll need to devote time and effort to your stock trading. This isn’t a get-rich-quick scheme.

You’ll need to get an education and develop your trading skills. You’ll have to practice and keep practicing.

One way to practice your skills is by paper trading. It’s how you can start learning without risking actual capital. 

With StocksToTrade’s paper trading feature, you’ll be able to scan for opportunities, build watchlists, and more. And StocksToTrade uses real-time stock quotes and volume, so you’ll get an idea of the full experience.

Check out StocksToTrade with a 14-day trial for just $7.

Where to Start Learning Stock Trading

If you’ve read this far, you have the desire to learn stock trading.

I think this is a great time to get into stock trading. There’s this great tool called the internet to help guide your research. You can watch YouTube videos, review charts, and more, all online.

If you’re serious about learning stock trading, consider joining the SteadyTradeTeam community. We provide you with twice-daily mentorship sessions and hands-on practice as you develop your trading strategy.

And listen to the SteadyTrade podcast to get an in-depth view of all things stock trading-related. It’s a totally no-cost way to learn more about trading, the markets, and so much more.

Understand the Stock Market

Let’s talk about what the stock market is … It’s a collection of marketplaces where investors buy and sell shares of publicly held companies. The New York Stock Exchange (NYSE) and the Nasdaq are the two you’ll hear about the most.

These stock market exchanges operate under Securities and Exchange Commission (SEC) regulations. There are also over-the-counter (OTC) marketplaces. These don’t have the same regulatory requirements.

In general, the stock market works as a platform where buyers and sellers meet in an open marketplace.

Let’s get to the basics…

 

Learn How to Trade Stocks: Stock Market Basics

The stock market provides a place for traders and investors to park their capital. You can trade stocks, index funds, exchange-traded funds (ETFs), mutual funds, and options. 

A stock is a single share of an individual company, while a fund represents a collection of securities. 

Stocks can be categorized by their market size — large-cap stocks, medium-caps, small-caps, and microcaps.

The microcaps are also called penny stocks. Many traders with small accounts favor penny stocks. Why? Because of their price point and potential to make big intraday moves.

How Do I Learn to Trade Stocks? 6 Tips for Beginners

Now that you know some stock market basics, here are six tips to keep in mind as you learn how to trade stocks…

Tip #1: Never Stop Learning

The stock market is a big ecosystem with many moving parts. Spend time researching and learning throughout your trading career.

If you’re active, learning can be addictive and fun. The StocksToTrade blog is a great place to start.

Tip #2: Create Watchlists

A watchlist is a list of a handful of stocks that you’re keeping an eye on. Traders use watchlists to help identify potential trading opportunities. Your watchlist should be a list of stocks that look good to you based on your research. 

StocksToTrade has a ton of tools that can help you create watchlists. For one — sign up for our no-cost weekly watchlist to see what’s on our radar every week.

Tip #3: ‘Be Like Water’

That’s a saying attributed to martial arts legend Bruce Lee. It applies perfectly to stock trading — you need to be fluid and nimble, able to jump in and out of trades as stock prices fluctuate.

Keep in mind you’ll have winning and losing trades … Be like water, my friends!

Tip #4: Practice Makes Perfect

We know that the more we practice something, the better we’ll be at it. Your success with stock trading depends in large part on what you put into it.

You have to give yourself time to get used to stock price action. You need to take a lot of trades to see what works and what doesn’t. Consider paper trading or trading small to gain experience.

Tip #5: Know Your Metrics

You can’t know where you’re going without knowing where you’ve been. The best traders keep track of their metrics and trades.

You can record your metrics in a trading journal or track your trades on a spreadsheet. There are also online resources available to help you maintain trading records and analyze the data.

Reviewing your metrics daily is a great way to learn what works and what doesn’t.

Tip #6: Make It Routine

You’ll often hear traders say this career is a marathon, not a sprint. Like I said, it takes time. 

So start by planning your days and stick to a routine. It’ll be up to you to hold yourself accountable. Hold your feet to the fire … No one else will do it for you.

You have to do the research and get educated. The SteadyTradeTeam community is a great place to learn, build a strategy, and ask questions along the way.

Learn How to Trade Penny Stocks as a Beginner

By now, you should have a good idea that there’s SO much more to learn. Let’s get into some tips on how to trade penny stocks as a beginner…

Tip #1: Get a Brokerage Account

You can’t trade penny stocks without a brokerage account.

A broker acts as the intermediary that executes trades on your behalf. There are many different brokerages to choose from, and it’s important to pick the right one. 

They aren’t all the same. Brokerage companies will have different requirements for opening an account, different commissions, and different fee structures.

You’ll have to choose one that fits your stock trading needs. If you have StocksToTrade, you can integrate some brokers with the platform and do all your research and trading in one place. 

Tip #2: Decide How Much Capital You’ll Use

You’ll need to keep funds available to buy and sell stocks. The amount you start with depends on your comfort level and your broker’s capital requirements.

Some traders start with a few thousand dollars, sometimes even less. What’s important is that you don’t risk money you can’t afford to lose.

Tip #3: Select Trading Software

To Picasso, a paintbrush and canvas were the starting point for a masterpiece. For a trader, the starting point is a trading platform and trading software.

These are the tools of the trade. You need charts, scanners, and market data. My favorite platform, StocksToTrade, gives you access to all these things and much more. Check out that 14-day trial for just $7.

Tip #4: Get a Good Trading Computer

Without a good computer, a great trading platform like StocksToTrade isn’t that helpful. You’ll need a computer that can handle your trading platform. You’ll also need a good internet connection.

It’s up to you whether your computer is a desktop or laptop. If you’re looking to be a serious trader, it’s worth looking into high-quality computers. But don’t spend money on a crazy setup that you don’t need. Start with a dependable machine and build from there.

Tip #5: Develop a Plan

At the market open, you’ll see emotions and nerves going at full speed. Stocks in volatile markets move fast. It gets kinda crazy. 

Smart traders deal with the mayhem by having a well-developed trading plan ahead of time. Once your trading plan is in place, you’ll have to trade that plan and follow it. Stay disciplined!

Learn How to Manage Emotions When Trading

This is one of the most difficult challenges you’ll face. It’s like Jedi Master Yoda said: “You must train yourself to let go of everything you fear to lose.”

You’ll never trade like a robot, but you must learn to manage your market greed and fear. Trading a real account will test your emotional composure. You will experience FOMO.

My advice? Take it slow, stay disciplined, and know when you need to take a break.

Learning How to Trade Stocks: Common Mistakes

Trading is difficult, and you will make mistakes. The best traders I know aren’t accurate 100% of the time. You can’t let the mistakes take you over.

You’ll need to keep your composure and cut losses quickly when you’re wrong. That’s one of the biggest mistakes new traders make.

Not setting a max loss is another common mistake for new traders. You never want to take a loss that you can’t recover from.

 

Smart Trading Strategies for Beginners

There’s a ton of different stock trading strategies to choose from. 

Traders like patterns, because they’re easy to recognize once you learn them. The easiest pattern for new traders to learn is the bull flag pattern.  

Scalping is another popular strategy. That involves selling your position in pieces the moment it becomes profitable.

You could also trade the momentum strategy, looking at news catalysts and trading on them. Traders also try to profit as a stock spikes up with volume.

Keep in mind … a strategy doesn’t need to work all the time to be profitable.

You have to follow your rules and have a great risk management system in place.

Apps to Learn How to Trade Stocks

There’s no question we’re living in the information age.

There are plenty of apps available to help you learn to trade, like TD Ameritrade, Robinhood, WeBull, or Twitter. It’s up to you to make the most of those tools.

Want to dig into the trading trenches? Come check out the SteadyTrade Team.  

Best Books for Learning How to Trade Stocks

Sure, there’s a lot available online, but I recommend reading books as well. And who doesn’t enjoy curling up with a good book now and then? Check out this video for some of my top trading reads:

 

Frequently Asked Questions About Learning How to Trade Stocks

No doubt you still have questions. Let’s take a look at a few… 

Can I Trade Stocks by Myself?

Yes. You can trade stocks yourself. No one else can make trades for you. You’re responsible for your trades. So you must hold yourself accountable.

Keep in mind, you don’t have to trade every day. It’s important to only trade the best setups.  

But trading doesn’t need to be solitary. Come be a part of a fantastic trading team by joining our SteadyTrade Team community.

Can You Teach Yourself to Trade?

Sure. I know of many traders who’ve done that. But know that learning how to trade takes time … It’s challenging, and there’s capital at risk.

You run a greater chance of blowing up your account by jumping in without being prepared. That’s why most new traders fail. They don’t take the time to get an education, so they blow up and get too discouraged to continue. That’s why mentorship can be key.

What Are the Best Stocks to Buy for Beginners?

In the stock market, about 20,000 stocks trade each day. So it can be challenging to find worthy opportunities.

You could jump into big names like Amazon or Tesla, but these are expensive and very volatile.

At StocksToTrade, we like all kinds of stocks, from lower-priced junkers to higher-priced slow grinders. You gotta find what works for you.

How Long Does It Take to Learn to Trade Stocks?

That depends on you. Everyone learns at a different pace.

It takes time to learn how to trade. You can speed up your learning curve by getting an education and joining a solid trading community.

Which Stock Trading Site Is Best for Beginners?

The best trading site for a beginner is the one that meets your needs.

I’m a little biased here, but I think StocksToTrade is the best stock trading site for education and its platform is amazing for trading. Get a 14-day trial for $7 — or combine your trial with the game-changing Breaking News Chat add-on for $17.

How to Be Successful When Learning the Stock Market

There are many measures of success while you’re learning the stock market. It’s all about your goals.

Mastering technical analysis is a good start. So is having a solid trading plan in place for exact entries and exits. And don’t forget about your stop-loss! Setting good stops and sticking to them is VITAL in the stock market.

Conclusion

The market’s becoming ever more attractive to new traders. It’s one reason we’re seeing gigantic moves in the market this past year.

Be prepared to learn and work … the rewards can be worth it. Get after it by learning to trade, sharpening your skills, and mastering the markets.

Again … I encourage you to join our SteadyTradeTeam community. And start your trading journey with StocksToTrade — get your 14-day STT trial for $7 today!

How do you plan to study the markets? What do you love most about the markets? Tell me in the comments!