How to Get Into Stocks: 12 Key Steps for Beginners

how to get into stocks

Just because getting into the stock market is logistically simple doesn’t mean it’s easy to be a good trader. So let’s discuss how to get into stocks and the stock market.

First, the good news: It’s actually pretty easy to become a trader. You don’t need special degrees or certifications. Basically, all you need is a brokerage account, a laptop, and a stable internet connection.

But those are just the technical requirements.

Getting to the point where you can potentially profit in the stock market requires a lot of hard work and dedication. You need to get in the right mindset, gain an understanding of how the market works, and learn how to execute trades well.

So let’s get to some key steps to help you get into the stock market as a beginner…

What Is Stock Market Trading?

Now that I’ve given you some sage market advice, it’s time to get into the nitty-gritty of the specific steps for how to get into stocks.

To help you better understand stock market trading, let’s go over a few basics … And when you’re ready for more, check out key stock terms here.

What Is a Stock?

A stock is a share of ownership in a company. If you own a share or shares of stock, it gives you certain claims to the earnings and assets of the company in question.

Buying and Selling Stocks

Shares of stock are represented by stock certificates, which represent a legal document. It used to be that you’d receive physical certificates that you’d take to a broker to sell.

These days, most trading is conducted online, and your broker holds your certificates electronically. Brokers can quickly facilitate purchases and sales. Again, this is usually done online now.

Stock Exchanges

Stock exchanges are where traders and investors can buy and sell stocks. These exchanges provide volume/liquidity in addition to a place where stock transactions can be conducted.

You’re probably familiar with the big exchanges like the NYSE and the Nasdaq. But for penny stocks, which are what I primarily trade, you’ll look more at smaller exchanges like the OTC markets.

Is It Possible to Get Into Stocks With Little Money?

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Day trading and investing used to be reserved for the wealthy. They’d have a broker to execute their trades and invest their money.

Now, with the internet and online brokerages, it’s possible to get into the market with very little money. Anyone can open an account and start buying and selling stocks. Even from your phone.

Online brokerages have made it easy for beginners to get into the stock market and manage their own money. There are even brokerages with no minimum deposit requirement. You could even start trading with $100 (although I don’t recommend that).

Later in this post, I’ll explain why I believe trading penny stocks is the best way to grow a small account. But let’s start at the beginning…

How to Get Into the Stock Market

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If you’re curious about how to get into stocks, first get your head in the right place. Here are some things I wish a mentor would have told me before I got started.

1. Open a Brokerage Account

To actually place market orders and execute trades, you’ll need a brokerage account.

Do your research and choose a good broker. This is how you’ll execute trades. You don’t want to be surprised to learn that you’re paying more fees or higher percentages than you thought.

Take the time to research the different options out there and choose the best one to suit your style.

Choosing the Right Brokerage

This isn’t a one-size-fits-all model. The right broker for you will depend on things like how much money you have to trade, your trading style, the tools you’re looking for, and so on.

Need more guidance? In this post, I discuss the online brokers I use, including some pros and cons of each.

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How to Trade Stocks Using an Online Broker

Once you decide which broker to use, familiarize yourself with how their platform works. That’s where you’ll find news, charts, and price quotes, and execute your trades.

You’ll need to know how to enter a market or limit order and how to execute trades. 

When I first started trading and researching stocks, I had to go through so many websites to find the information I needed before entering a trade through my broker. It was slow and painful…

So I helped design StocksToTrade. It’s a trading platform specifically designed to find the best penny stocks to trade. You can integrate it with your brokerage account and have everything you need in one place.

I recommend the paper trading feature to get familiar with how to enter and exit trades without risking real money. (I’ll go into paper trading more later…)

2. Determine your Stock Trading Goals

Before you get into stock trading, determine your stock trading goals. What do you want to get out of trading?

Are you saving for a family vacation? Do you just want a bit of extra money to spend? Or do you want to make this your career?

Also, determine how much you can afford to invest or trade in the stock market. You might find you need to save up before you can get into trading the stock market.

Never risk more than you can afford to lose.  

3. Lose Some Money and Learn From Your Mistakes

If you want to learn how to get into stocks, you need to lose some money first. I’m half-joking.

Many students who apply to my Trading Challenge find me because they’ve lost money. They tried becoming a trader alone, with no knowledge or preparation. And they’ve seen what it’s like to trade based on their gut instinct. The results aren’t usually pretty.

The good news? Losing money can be a powerful motivator. The humbling experience can make some traders appreciate the power of knowledge.

You will make mistakes as a trader … no matter your trading experience. So if you want to learn how to get into stocks, be prepared to lose. I’m wrong in plenty of trades. But I keep my losses small and learn from my mistakes.

If you can look at your mistakes and learn from them, they can be powerful teachers.

It’s why keeping a trading journal is key. It’s how you can track your mistakes and successes. As you review it over time, you can find patterns in your own trading to help you trade smarter.

4. Learn From Other Traders

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This is gold if you want to learn how to get into stocks and stay there: learn all you can from other traders.

Find a mentor who you can learn from. Watch what other traders do and learn from their successes (and failures). It can help inspire your own trading.

Let me be clear: Observing is not the same as copying other traders or following other traders blindly.

That will never work out well. There are too many factors involved, and you can never emulate someone completely. By the time that you copy someone else’s trade, you’re already behind the curve.

You need to figure out your own style.

However, seeing other trading styles can inform and motivate you on your journey.

5. Learn Strategies That You Need to Master

The stock market is all about strategy. Without a plan, you’re basically gambling.

To really make smart trades, you have to study, research, and make solid plans. This typically starts with building a watchlist of stocks, then narrowing down your choices. Next, it’s time to analyze.

You could start with fundamental analysis

That’s how you evaluate a company’s performance, earnings, press releases, and financials. You can find clues on how catalysts could affect a stock’s price.

But most day traders focus on…

Technical Analysis

Here you focus on the actual stock’s performance.

With technical analysis, you look at historical data to review the stock’s performance over time. You’re looking for past trends that could inform what the stock will do in the future.

Here’s what to look for:

  • The price action, or how the stock price has moved over time. For instance, does it have a history of gaining?
  • Price trends, or predictable spikes or dips. Are there trends in the price, maybe at different times of the year?
  • Patterns. Often enough, when a stock performs in a particular way in the past, it can repeat itself pretty closely in the future. So, when you look at a stock’s performance over time, do you see any patterns emerging?

Key Chart Patterns

Over the years, I’ve identified key chart patterns that I depend on and look for when seeking out trades.

One of my favorites is what I call the supernova. I named it after supernovas in space, which have a big explosion and then fizzle out.

An explosion in a stock’s price creates many opportunities for traders. You can buy as the stock soars in price or short sell on its way back down (some traders do both).

While that’s my favorite pattern, it’s far from the only one out there. In my free penny stock guide, I cover more patterns in greater detail.

6. Focus on Some Key Setups

When you’re learning how to get into stocks, you can easily become overwhelmed. Start slow and focus on just a few things at a time.

Instead of scattering your attention in a million directions, zero in on a few key setups.

In my Trading Challenge, I introduce my students to several key setups and patterns. It takes time to master patterns. That’s why it’s smart to start with paper trading first. You get a sense of how trades and patterns play out without risking cash.

Then you can work on progressing to actual trades. By focusing on a few key setups, you can refine your methods.

7. Do Some Fact-Finding

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If you want to learn how to get into stocks, start with a fact-finding mission. Search online for day trading, penny stock trading, and any other facets of trading that might interest you.

A great place to start is with my free online guide to penny stocks. Use this guide to discover some of the basics.

8. Paper Trading Before Getting Into Stocks

For many traders, paper trading is a powerful first step toward making actual trades.

Paper trading is simulated trading that closely mimics the look and feel of live trading. But you don’t risk actual money. It’s sometimes referred to as “virtual trading.”

It’s a way to practice trades without actually investing your money. Sure, it might not come with the adrenaline high of trading real money, but it’s a safe way to get a feel for the process.

It’s easier to deal with making mistakes with virtual cash than with real money. I recommend the StocksToTrade paper trading platform.

9. Go Slow

A lot of people who are drawn to day trading have extreme, black-and-white views on the world. This can be good if you’re willing to use your analytical attitude for in-depth research on stocks and obsessively watching for patterns.

But if you’re expecting to get rich quick, think again. Like most things in life, becoming a great trader takes time.

It won’t click overnight. You need to take a slow, steady approach to trading and work to improve over time.

One key to how to get into stocks? Adjust your expectations. There will be many ups and downs as you find your way and develop a trading style.

If you expect to make money right away, you’ll likely end up disappointed. Give yourself time to develop and grow by going slow.

10. Build a Stock Portfolio

When you buy and hold stocks, they become your stock portfolio. Long-term investors like to build a diversified portfolio. In short: don’t put all your eggs in one basket. 

It’s solid advice. I don’t invest in stocks, but I tell my students not to go all in on one trade.

Don’t risk too much in one trade — you could blow up your account.

11. Reduce Your Risk

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Managing risk is the name of the game when you’re learning how to get into stocks. If you risk too much and blow up your account, you’re out of the game.

You should always know your risk level before entering a trade. My rule #1 is cut losses quickly. When a stock isn’t doing what I want, I get out.

Keep your losses small so you can continue trading and learning the nuances of the market. That’s what I teach my students.

It also comes down to studying and screen time. You need to stay in the game long enough to see the patterns play out in real time. That’s how you gain confidence in the markets.

How to Get Into Penny Stocks

Curious about the best way to get started in the stock market? Since a lot of new traders are starting out with small accounts, it’s important to make the most of every trade.

At the same time, as a new trader, you want to focus on small gains. Don’t take huge positions in trades. Remember, small gains add up.

I think the best and most accessible way to grow a small account is through trading low-priced stocks, aka penny stocks. But you need a good strategy and rules.

Penny stocks don’t always sell for literal pennies. These are stocks that trade for $5 or less per share.

While the penny stock market is notoriously volatile, its rapid fluctuations can offer the opportunity for fast gains.

Penny stocks are how I made my fortune in the stock market,* and they’re the primary focus of my teaching. I firmly believe that they offer opportunities for traders, particularly those who are willing to work hard. Even if they’re starting with small accounts.

(*These results are not typical. Individual results will vary. Most traders lose money. My top students have the benefit of many years of hard work and dedication. Trading is inherently risky. Always do your due diligence and never risk more than you can afford to lose.)

12. How to Get Into Stocks: Never Stop Learning and Keep Studying

A continued dedication to learning is not just important but essential as a trader. As William S. Burroughs once said, “When you stop growing you start dying.”

Continuing to learn will help you adapt to market shifts and changes. When the market changes and your go-to setups don’t work anymore, having a large knowledge base can help you adjust.

It’s why maintaining a trading journal is smart. You can keep track of your own patterns as a trader and learn from your past experiences.

Keep growing in every way you can. Read, watch videos, and absorb knowledge about trading, techniques, tips, and trading strategies.

There’s the SteadyTrade podcast that’s geared toward helping newer traders. You can also follow successful traders and their trajectory.

Often, resources like these can inspire you and guide you down the path of trading that seems most appropriate for you.

Keep Studying

Before you start trading, you need to develop strong study habits. It will help you amass trading knowledge quickly and develop good research habits.

If you’re accepted into my Trading Challenge, you can watch all my videos and read through the study materials.

But you should also study stock charts independently. Even if you’re not trading yet, looking at stock charts can help you find patterns. That will serve you well as long as you trade.

Expand Your Knowledge Base

To stay relevant and to improve as a trader, you must continually expand your knowledge base. So if you’re asking how to get into stocks, this is key.

You have to keep up with the news, learn how to read financial reports, and know which setups work best for you in different market conditions.

So keep reading, watching my videos, listening to podcasts, and improving your knowledge. If you make this a daily habit, it will serve you well as a trader for years to come.

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Join My Trading Challenge

Let’s be clear: I don’t accept just anyone into my Trading Challenge. I only want to work with dedicated students.

When I started trading, I didn’t have a mentor. I was ultimately successful, but not because it was easy. I made money because I worked my butt off for it.

But I had little guidance and made plenty of mistakes because of it. Since I was obsessive, eventually I found my way.

My motivation as a teacher is to be the mentor I never had.

I know not everyone is willing to stick with it through all the ups and downs. And they don’t have to. Through my Challenge, traders can benefit from learning from me and potentially avoid the mistakes I’ve made.

I want to help you cut through the BS so that you can fast forward to being the best trader you can be.

My Challenge includes lessons, live webinars (from me and my millionaire students), blog posts, and more.

But it also includes trading. Ready to dive in and start taking small positions? I’m right there with my students. Each year, I start trading with a small account so I can show everyone what’s possible. It’s also why I show every trade publicly.

Up for the Challenge? Apply today.

The Bottom Line

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Still ready to learn more about how to get into stocks? The stock market is trickier than it might seem from the outset. Yes, the entry is extremely easy and requires little equipment.

But to become an intelligent, self-sufficient trader takes time and effort. That part isn’t easy … You’ll have to consider many different things, expand your mind, and work hard. But it can be worthwhile.

What else do you need to learn to get into stocks? Are you ready to enter the stock market? Let me know in the comments … I love to hear from my readers.