Getting Started

One of the huge attractions of trading today is the staggeringly low cost of entry. Gone are the days when serious traders needed to spend thousands on the technology and data feeds required. In fact these days you can be up and running for just an outlay of a few hundred pounds, or less if you already have some of the basics in place….

PC

PC or Mac

Most people have one anyway these days, but remember whilst you don’t need a top of the range computer, it is worth investing in a robust up to date machine that can handle the software you will want to run on it.

Internet

Internet Connection

Again, most people already have an internet connection in their home.

Whilst it is possible to place trades over the phone with your broker, it is much easier and quicker to place trades in real time online through your broker’s web platform. If you are using separate charting software then that will obviously need to get its data feed over the internet too.

You certainly don’t need ‘100meg broadband’ and actually just a basic 2meg connection is fine for most traders. Stability / reliability is the most important consideration when choosing an internet service.

Broker

Broker

Every trade you take will need to be placed through a broker. Consequently you will have to set up at least one broker account. This can be done online though the broker’s website in the majority of cases quite quickly, though you will have to provide supporting documentation once your initial application has been accepted. All in all you can be up and trading in just a few days once you have funded your account with them.

Choosing the right broker for you is an important activity and the features, benefits and deals on offer from the plethora of brokers that have setup over recent times can be overwhelming. The most important factors to consider when making a choice include:

  • Markets: What tradable markets do they offer? As a minimum you’ll want a major stock market(s), foreign exchange plus the major global indices.
  • Spread: The spreads offered will vary between brokers and can make a real difference to your trading. Tighter more competitive spreads on the markets you want to trade mean you will have the opportunity to get into profit more quickly once a position is opened. Remember EVERY trade opened starts off in a losing position because of the effects of spread!
  • Margin: The percentage amount of your account that the broker holds as security against your open positions will determine how many trades you can have open and how large they can be at any one time. The danger lies in the broker ‘margin call’. This is when the the amount of margin required to maintain your positions falls below the adjusted value of your positions. At this point the broker will close all your positions automatically for whatever they are worth at the time – not something you want!
  • Charting – More and more brokers now offer free charting packages with their accounts. This can replace the need for a dedicated charting software subscription. However, you generally get what you pay for in life and some broker charting packages are obviously better than others.

There are other pluses and minuses you can look for and a quick search of the internet will reveal whole websites dedicated to comparing brokers and we suggest that you do. The other positive to note is that the broker market is now fiercely competitive and spreads in particular are tightening all the time.

Charting Software

Charting Software

As mentioned above, more and more brokers are now offering free charting software with their client accounts and it is well worth looking into this when choosing a broker.

That said specialist technical analysis charting software will always have an edge over anything free and for the small amount of extra monthly spend, it can be well worth it.

TradeSecret’s Recommendation: ShareScope