Starting from Nothing to Trading
- Alex Morrison
- Jul 14
- 10 min read
In this guide, I hope to provide you with all of the information that you need to go from absolutely nothing and no experience, to making successful trades.
1. Decide what to trade.
2. Pick a broker.
3. Learn how to enter trades and use the broker.
4. Trading strategy.
5. Start trading.
Intro: What is Trading?
Firstly, what is trading? In the simplest way, it is buying and selling different assets with the goal of making a profit. Similar to how you can buy playing cards or old video games and then when the value goes up, then you can sell it for more and make a profit.
So, what are these assets that are traded? They can come in many forms, but here we will cover the most popular and common ones.
Stocks
First, there are stocks. The stock market is a place where people can buy and sell very small percentages of companies. By small, I mean very, very small. As in ~0.00000001%, but this is dependent on how big the company is. This is mainly because companies are worth millions or billions of dollars and if the average person wants to be a part of it, they need to break that down into very tiny fractions. These small percentages that you can buy, or sell are called shares. Shares are just the units of ownership issued by a company.
The reason why companies allow you to buy these small percentages is to raise funds. The idea is that you get a small bit of ownership in the company, and they get money to help them fund projects or grow and progress. The reason why people like you and me decide to buy these shares is to potentially make more money. Let me give you an example.
Let’s say that company X has shares that are worth $10 each, and I decided that I want to buy 100 shares. So, in total I purchased $1000 worth of company X. As time goes on, company X expands and makes progress, and the company increases in value. So now each share is worth $13. If I now decide to sell my shares, my $1000 turned into $1300 and I made $300 profit. This is the main idea of buying and selling stocks. Now, you can also profit from trading when the price decreases, this is called short selling, but that won’t be covered here.
Currencies
Next is currencies, this could be forex or cryptocurrencies. Forex, or foreign exchange, is the market where different global currencies can be exchanged for one another. Cryptocurrencies are a form of digital currency, so unlike the physical versions of the dollar, pound or euro, cryptocurrencies only exist digitally. Currencies function similarly to stocks, but instead of buying and selling shares, you are exchanging one currency for another. Such as USD to JPY (the US dollar to the Japanese yen) or USD to BTC (US dollar to Bitcoin). The idea with trading currencies is buying and selling to gain a profit from the fluctuations and changes in value between different currencies.
1. What should you trade?
There are benefits and drawbacks to all of the different assets. Let’s try to break it down so choosing can be easier.
When choosing what to trade, you’ll need to consider your location, the amount of money you are starting with, how much money you are willing to lose, and how much money you are wanting to make.
To make money with trading, you need to buy and then sell, and the larger the difference in the price that you buy and sell at, the more profit you will have. For example, if you buy an asset with $1000 and then the price increases 1% and you sell, then you sell the asset for $1010, and your profit is $10. Now if instead the price increased 16% and you sell, then your profit is $160. So, to maximize your profits, you can either have larger percentage changes in price, or you can increase the amount of money you are using.
To get higher percentage changes in price, you would need to choose an asset that has the largest changes. With currency trading, specifically forex trading, price changes are much smaller. On average, the largest price change within a 24-hour period is around 0.2% to 0.95%. For cryptocurrencies, the most popular ones will have slightly larger percentage changes, somewhere between 1.2% to 5%, for other small cryptocurrencies changes can be upwards of 300% or even 1000% in a day, but these also come with drawbacks. Then with stocks, the most popular, large companies will have changes of anywhere from 1% to 30% and smaller companies will regularly have movements that are 50% to 300% or more.
It may seem that the small crypto currencies are the best options, but there are a few disadvantages. These large movements will generally happen once for a given cryptocurrency and are almost always having these large changes due to insider manipulation. This means that unless you are an insider with the cryptocurrency, you will most likely miss these movements or lose money on them. With significantly less regulation on crypto trading, there’s nothing stopping the price of the currency from dropping 99% in minutes making it much more difficult to buy and sell profitably as a beginner. We suggest staying away from these small, lesser-known cryptocurrencies if you are beginner, so for now let’s focus on large cryptocurrencies, forex and stocks.
The next way you can increase your profits is by using more money, but what if you don’t have more money? Depending on your situation and where you’re located, you can use something called leverage. This is borrowing money from your broker to make trades. For forex trading, typically brokers will offer leverage between 50x and 200x, and for crypto it is usually between 5x and 20x. With stocks, it is less common, and a lot of brokers won’t offer leverage, but if they do, then it is usually between 1.2x and 4x. Let me give you an example of how it would work.If you start with $1000, and are using 50x leverage, then your broker will allow you to use $50 000 to trade. So, if you use your $1000 with 50x leverage and the price changes 0.5%, then instead of making $5 profit, you will make $250 profit ($1000 x 50 x 0.005 = $250).
Depending on where you’re located and how much money you are starting out with, there may be different restrictions on trading and whether you can use leverage. In the US, there is the Pattern Day Trading (PDT) rule, which restricts how much trading you can do if you have less than $25 000. You can read more on the PDT rule here. In other places, leverage might not be allowed for trading, meaning that you can’t borrow money to make trades.
Which do you pick?
Well, whether you pick forex, stocks, or cryptocurrencies, they can all be extremely lucrative. If you have more money to start with and leverage is useable, then you might pick forex trading. The movements are smaller, and happen slower, but it is still profitable! If you have less money to start with and can’t use leverage, then you might choose stocks.
For beginner, we recommend starting with stocks. Seeing as many people start with relatively small accounts (less than $5000), cannot use leverage, and potentially have trading restrictions, trading stocks can still allow you to grow your account quickly.
2. Choosing a Broker
A broker is a company that allows you to buy and sell different assets like stocks, forex currencies or cryptocurrencies. The broker that you choose will depend on what you have decided to trade, your location, and what tools or features you may want to use. When picking a broker, some key things to look for would be low commissions and ideally bracket orders (also called OTOCO orders or profit-taker/stop-loss orders) are offered. The bracket orders aren’t required, but they can make trading a lot simpler and more automated! We’ll talk a bit more about them later. Here are a few popular brokers that Stockminds users have had success with:
Stock Trading | Forex Trading | Crypto Trading |
Moomoo Interactive Brokers (IBKR) TradeZero Questrade |
If you’re looking for an all-around good broker, then we suggest using Interactive Brokers (IBKR). They have all the tools you need, offer low commissions, and allow trading stocks, forex and cryptocurrencies. They are also offered all around the world, and is popular globally, so it is likely offered where you’re located.
Once you’ve chosen a broker, you’ll need to deposit money so that you can trade. Next is getting familiar with how to use the broker to actually make trades!
3. Learn How to Enter Trades
Once you’ve chosen a broker, set up your account and funded it (deposited money to allow you to trade), you’re going to want to get an understanding of how to enter trades (buy and sell), how to edit orders, and how to monitor the price. Here are some things that you will want to familiarize yourself with before trading.
Order Entry
Side/Action – This is what the order is doing. Either buying or selling your asset.
Type – There are quite a few different order types, but for beginners, the main ones are Market, Limit, and Stop.
Market orders will buy or sell at whatever the current price is (whatever price the market allows the order to execute at).
Limit orders allow you to specify the price you want to either buy or sell at, and it will only execute if it is at that price or better. So, if it is a buy limit order and you set the price to $4, then it will only execute if the price is $4 or cheaper. If it a sell limit order, then it will only execute if the price is $4 or higher.
Stop orders allow you to set a price where if it is reached it will sell or get out of the trade. So, if you currently have shares at $4 with a stop at $3.80, then if the price reaches $3.80 or lower, then it will sell your shares.
Duration – This is how long the order will be active for. If it is “DAY” then it will cancel when the market closes, if it is “GTC” or “Good-till Cancelled” then it will stay active until you cancel it.
Quantity – This is the number of shares (for stocks) or units (forex and crypto) that your order will trade. If it is 100, then you will buy/sell 100 shares of a stock or buy/sell 100 units of a currency.
Bracket Orders – These are also called OTOCO (One-triggers-other-cancels-other) or profit-taker/stop-loss orders. These orders combine buying, selling for profit, and selling for loss, all into one. They are very useful for semi-automating trades and keep the number of steps for trading to a minimum. Here is a video on how bracket orders works and how to enter them: Automating Trading Using Bracket Orders
Something to keep in mind, is you can only enter orders for the total amount of units or shares that you have. So, if you have 100 shares, you can’t enter a stop order for 100 shares as well as a limit order for 100 shares, the only way to achieve this would be with a bracket order.
You’ll want to know how to edit orders, such as adjusting the limit price or quantity of an order that you already sent. You’ll also want to know how to cancel orders. These are both handy for if there are mistakes or you need to buy or sell and can’t wait for existing orders to execute.
Monitoring Price
Regardless of your strategy or how you end up trading, it’s good to know how to monitor price so that you can stay on top of what is going on. Some brokers will offer real-time price quotes so you can see what the current price is, but for most, there is a delay in the price shown and you are required to pay to get the real-time prices.
Luckily there are free tools out there for real-time price monitoring. TradingView is the most popular one and allows you to see how the price is moving easily.
Each broker will have a different layout, but the basics of order entry and order editing will be the same. Be sure to look at how your broker is setup to make sure you know how it all works. Tutorial videos or guides provided by your broker can be very useful.
4. Trading Strategy (Stockminds Intro)
Now that you have a broker, funds deposited, and know how to enter, exit, and edit trades, you’ll need a strategy. You can think of this as when you buy and sell. All that’s needed to have a successful strategy is a plan for when to buy and sell so that over time, you are profitable. This is where a lot of new traders will get lost. There are endless successful strategies out there, and so many people you can learn from. This is where Stockminds makes your life a lot easier.
Stockminds is built to make trading simple. Our AI does millions of calculations to provide you with the exact prices to buy and sell at, so you can have a successful strategy without needing to spend hundreds or thousand of hours and dollars trying to learn or develop your own. Here is a video showing exactly how you can use the Stockminds AI strategies:
5. Start Trading
This is it! You now have everything you need to start making money trading! It’s just a matter of actually making the trades! For getting started, here are a few recommendations to ease into it.
1. Start with less money or paper trade. While you are getting used to entering and exiting trades, start by using less money in each trade or trade with fake money. This will prevent or limit losses. You can use tools like TradingView or a demo account with your broker to paper trade (trading with fake money), or you can enter trades using minimal money. For example, buying and selling 1 share or 10 units of a forex currency.
2. Track your trades. For every trade you make, record what you are trading, the quantity, your buy and sell prices and times of buying and selling. You can do this in a spreadsheet or using tools like StonkJournal. Tracking trades helps you to see results, manage your strategy and identify what you may be doing wrong or right!
3. Limit your risk. Generally, people are sceptical of trading and think it is risky, but it is only risky if you choose for it to be. If you know what your entry and stop loss is, then you can figure out exactly how much money you need to put into the trade to ensure you lose a specific amount at most!
4. Keep it simple! A lot of beginners will jump right in, make a lot of trades, and before they know it, their account has no money left. Be strict and stick to your strategy. Take one or two trades a day (or even less). Some days might be losses, some might be profits, but with trading, it’s the results over time that you want to focus on, not the results from one trade.
For some more helpful resources on entering trades, how to use Stockminds and even recorded trades, visit our YouTube channel!https://youtube.com/@stockmindsco
