Tips for a new stock trader

Stock trading is not for the faint of heart.  You must know yourself and understand that only you can determine what you want.

My investing page has tips and links to free educational stock trading material which will help you understand the different securities that I have traded.

Do a Google search for discount broker review to see what other websites and/or people say about the different brokers available.  From there, open an account and make a deposit.  Ensure that the amount of cash and/or securities is above the minimum balance required.  Some discount brokers charge an account management fee if a balance is too low.  It does not hurt to call the broker to ask questions about fees and stuff.

Visit any banking website that has a direct investing or trading page.  On the bottom there is the IIROC and CIPF. These are the Canadian associations that protect investors.  Therefore, any discount broker that is a member of the IIROC and CIPF should be fine.  Both the IIROC and CIPF have a search page to verify that the broker is indeed a member.

You can buy mutual funds, ETFs and/or other securities.  I recommend starting with ETFs since many brokers currently allow traders to buy an ETF for free.  The cost to sell is the fee your broker charges.

DO NOT TRADE ON MARGIN

Margin is borrowing money from the broker to buy securities.  The broker has the right to sell your securities at anytime if the price of your security drops and the broker thinks that you will not have the cash to cover the borrowed money lost.

Use Investopedia

Use Investopedia for any words, new trading alternatives, or things you may have questions about while trading.  Investopedia is the Wikipedia for stock traders.  It is my go to website for stock market answers.  Google is used quite often too.

Use limits and not market

Limits will allow you to lock in your gains and minimize your losses.  It is also useful for buying a stock when the price drops for a second or spikes for a second.  For example, if a stock’s last traded price is $10, you can set a limit at $9.90.  As the last traded stock price goes up and down, you may find that your order went through at $9.90 while the last traded price currently sits at $10.  You can then set a limit of $10.10 and see if anyone accepts your offer.  You will have to calculate the trading fees to ensure you are selling at a profit.

Use a practice trading account

https://practicelogin.questrade.com/Signin.aspx

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