Online trading depends on the same principles and skills as off-line trading, so use
them to guide your thinking and actions
From How To Do Just About Everything to Succeed, in association with eHow (Collins, £9.99)
Steps
- Have a long, serious and brutally honest talk with yourself (and perhaps a trusted friend) about the kind of personality you have -you'll need to be disciplined and goal-orientated if you are to succeed.
- Be sure you have at least £3,000 in easily available funds
- Set limits to your trading activity, such as number of transactions and/or commission paid, for an initial three-month period.
- Research at least three online brokerage services and read all the 'terms and conditions' statements concerning trading accounts.
- Open an account with the brokerage service you choose for the minimum amount necessary to trade.
- Write down all your trading (buys and sells) immediately after they have been executed: date, time, quantity and price per share of the actual purchase. Use these records for tax preparation and save them in case you are audited.
- Evaluate your performance at the end of the three months. What were your gains and losses? Emotional reaction to the process? Did you stick to your goals?
Tips
Free research online is available from many of the big investment firms.
Avoid fee-for-service features of your account unless they will directly improve your
ability to trade intelligently.
Warning
All laws regarding securities trading apply to trading online.
Technical service calls and broker advice over the phone are rarely free - check first.
Never trade on advice from chat rooms, message boards or any other questionable sources.
Trade only with your savings until you are experienced. Only then consider borrowing to trade.