Trading Stocks from Home: How to Get Started

The biggest misconception about stock trading is that you need a lot of money to get started. You can have all the money in the world, but if you don't have a passion for trading and a keen interest in financial markets, you won't get far. But if you do, the rest will follow.

All you need (besides a trading account) is a fast Internet connection, a powerful computer, a home office, a trading system, and a daily/weekly routine. You can start small, part-time, and build on your success as your confidence grows. Since you can only focus on a small segment of the market - ETFs, breakouts, biotechs, options, and so on - you can develop your own trading system that best suits your lifestyle, goals, temperament, and resources.

If you are reading this, you already have the Internet and a computer. Opening a trading account is easy. Most people can find a quiet corner in their home and a block of time. All you really need is a trading system and a routine.

There are many successful trading systems. There is also an inverse correlation between the price of a trading system and how good it is. The best systems are free or are available for the price of a book (if you decide to buy one). You want a system that has withstood the test of time in multiple market conditions so it does not have to be new: Jesse Livermore,WilliamO'Neill, Stan Weinstein, Alexander Elder, and Ted Warren all had successful stock trading systems that they described in their books. An overpriced seminar or an online school will either fleece you or make you dependent on them; I'd stay away from those.

Now the hard part: how do you combine it all? You've got the book, you are sitting in front of your new powerful computer in your comfortable quiet home office, with your brokerage account trading platform open, symbols flashing enticingly. Now what?

One thing that won't help you much is virtual, or paper, trading. The markets are driven by emotions. It's one thing to bet paper millions and quite another to have your hard-earned money on the line. You won't know what you are made of until you put your money at risk. So virtual trading is fine for learning the technical side - order entry, chart parameters, etc. - but you won't learn how to make money that way.

There is no way around the learning curve. At some point you will just have to take the plunge. So that you don't take your house down with you, start small. Set aside an amount you can afford to lose and consider it tuition if you do.

You should review several systems to decide what suits you best but don't jump from system to system in search of the Holy Grail. They all require hard work, dedication, and time. When you find something you like, just watching it work by applying it to the situations you come across will do more for your growth than all seminars combined.

Other than that, just proceed in small steps at a pace you are comfortable with: read, learn, trade, watch, analyze. Eventually these activities will develop into a daily and weekly routine. You will know exactly what you need and where to get it. Add to your trading account as your confidence (and balance) grows. Good luck!