Stock Market Trading Guide: Learn How to Trade Stocks in 6 Steps

Are you ready to start trading stocks? Or have you already learned a stock market trading strategy but you’re not exactly sure how to get started? You’re not alone. Many aspiring traders don’t learn the basics (and they fail miserably), so you’re making a smart move by reading this.

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Wherever you are in your stock market trading journey, it’s always a good idea to review this six-step guide to stock trading. Ok, let’s do this.

What Is Stock Market Trading

Before we take a deeper dive, let’s make sure you know exactly what stock market trading is.

When many people think of the stock market, they imagine stuff like Warren Buffett buying some massive company like AT&T and sitting on it for years, collecting dividends as the company grows. That’s not trading — it’s investing.

Stock trading is a more active strategy, where traders buy and sell as the price of a stock fluctuates, looking to make profits.

Practically every stock fluctuates in price every single day, so if you know what you’re doing, you can potentially use that movement to your advantage. It’s what motivates traders like me to wake up early every day and jump into the ring.  

And thanks to the action in the stock price movements, I think you can have a lot more fun trading than long-term investing.

If that sounds good to you, let’s take a look at what trading’s all about and how you can be a part of the action.

Getting Started in the Stock Market Trading World

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People email me all the time asking: What do I do to start trading? How much do need to start? What do I need to learn first?

Really, this isn’t an exact science, so there’s no absolute right answer for everyone. All I can do is tell you what’s worked for me and some of my students.**

The most important thing is that you have a stock market trading strategy — a plan. Because otherwise, you’re just gambling. There are plenty of strategies and patterns that work, but some are definitely better than others.**

Apart from stock market trading strategy, work ethic and discipline, you don’t need that much else. You definitely don’t need a supercomputer with 20 screens. I work from my laptop most of the time.

Most people seem to think you need a lot of money to get started. That’s bullshit.

Most of my students start out with just a few thousand — some with just a few hundred. You just have to make profitable trades and increase your size as you make more profits.**

How To Trade Stocks for Beginners in 6 Steps

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Everyone loves a simple list, so let me efficiently break it down for you. Here’s how to get started trading stocks as soon as possible:

  1. Open a trading account. You only need a basic one. I’ll cover more about this topic in a minute.
  2. Find your niche. Different things work for different people. It could be day trading, holding stocks for weeks, large-cap tech stocks, penny stocks, etc. Find what works for you.
  3. Find a mentor. Sure, you could do it on your own, but if you find the right mentor it could seriously reduce your learning curve.
  4. Study, study, then study some more. Learning to trade stocks can change your life and give you the freedom to do whatever you want to do in life, so take it seriously.
  5. Start out small and manage your risk. It’s no use going big when you don’t know what you’re doing. Unless you’re a natural trading genius, it probably won’t end well.
  6. Keep learning and optimizing to scale your trading up. It’s an ongoing process. Never, ever stop learning. Always work on your trading and keep a trading journal. If you want the laptop lifestyle, you must dedicate yourself to learning all the time.

What Are Penny Stocks?

Only you can decide what niche works best for your trading style. As you probably know, I’m crazy about penny stocks. They’ve been very good to me.

Penny stocks are tiny companies with stocks priced under around $10. They’re rife with bullshit companies, sometimes even total scams. But don’t be scared…

If you know what you’re doing, penny stocks can be the absolute best place for a trader with a small account to make an amount large enough to let them live however they want.

You see, when you trade large-cap stocks like Amazon, Netflix and Microsoft, you’re competing with the world’s biggest, smartest, and richest traders, banks, and hedge funds. I’m not interested in that — are you?

But with penny stocks, your competition includes an ample amount of absolute morons. Billionaires don’t play in this game because there aren’t billions to be made, just millions. I’ll take millions. That’s totally fine with me. And it’s probably good enough for anyone reading my blog.

In the penny stock world, it’s not uncommon to see a stock move 20–100% or more in a week, or even within a day. If you can consistently catch just a part of some of these moves, it’s not hard to see how it could potentially grow your account quickly.

If you’re willing to learn the right strategy, develop your discipline, and watch the right stocks, penny stocks could be a great niche for you … just ask any of my top students.**

#1 Opening a Trading Account

To trade stocks, you need to open a brokerage account first.

Some brokerages are better than others, but you don’t need anything fancy. Some brokers will offer you leverage, an over-hyped trading platform and/or other unnecessary shit.

I like E-Trade and Interactive Brokers, but you might find a broker that works better for your needs. If you need more info on all the different types of brokerage accounts, read my comprehensive guide.

No matter what your strategy, if you’re just getting started, DON’T USE LEVERAGE!

If I had a dollar from every newbie trader I’ve heard from who got sucked into brokerage marketing and blew their accounts with leverage before they knew what they were doing, I’d be far wealthier. Don’t be another name on that sob-story list — just stay away from leverage, ok?

Be smart: Keep it simple and conservative while you’re learning.

#2 Technical and Fundamental Analysis

There are two main ways to analyze stocks: technical analysis and fundamental analysis.

Technical analysis involves the study of charts, price action, and trading volume. We look for patterns that have worked in the past that provide opportunities to get in on explosive stock price moves just before they happen.

Fundamental analysis is the study of what a company actually does, the technology they’re developing, how much money they make each quarter, and things like that.

Penny stocks generally don’t have much in the way of solid fundamentals. So what we focus on is the hype and excitement around a stock, like news stories and company announcements.

Many traders focus on just one type of analysis, but I recommend you use every advantage and combine both types.

#3 Practice Before You Start Investing

Want some experience in trading and analyzing patterns before you put your real money at risk? You’re ready to try paper trading. It’s a super-smart thing to do when you’re just getting started.  

Paper trading is like fantasy sports, but for the stock market. You pick your stocks to trade, enter the buy and sell details, and watch what happens to your imaginary account balance as the stocks move up and down in price.

Start paper trading now — it’s great experience without risking any capital. Head over to StocksToTrade and check out the simple and easy paper-trading options on the platform.

#4 Learn Stock Market Terms

P/E ratios, top daily gainers, dividend schedules, short selling … get used to phrases like these.

If you want any shred of a chance at being a decent trader, you’ve gotta know all the key stock market jargon. Here’s a big list of terms to know.

#5 Create a Stock Portfolio of High-Volume and Volatile Stocks

It’s no use having a portfolio of stocks that barely move day to day. If you’re going for potentially large returns on your capital quickly, you need volatile stocks that have enough trading volume so you can get in and out when you want.

With so many stocks out there, it can be a full-time job keeping on top of everything and tracking exactly where all the action is and which stocks are making the biggest moves. Thanks to killer technology like StocksToTrade, it can make the process much easier.

StocksToTrade takes a lot of the work out of finding and staying on top of the hottest stocks.

My team and I spent seven figures designing the platform to be exactly what we need as penny stock traders. So if you value your time and sanity, go check it out with a free trial.

#6 Keep Learning

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If you’re reading this post, there’s a good chance that you’re new to stock market trading, so I’ll let you in on a little industry secret: A staggeringly high amount of most traders lose. But it doesn’t have to be that way!

You see, most people who try to make it as traders are lazy as hell. They don’t have a plan … they don’t study … they don’t find a good mentor … and they lose everything quickly. Then they’re even more miserable than they were when they started. It’s just sad.

That’s one of the main reasons I teach: I try to be the mentor to my students that I never had. I wish there was someone like me teaching when I started out. I’m certain I could’ve gotten ahead far more quickly.  

I’m not the only stock market trading educator on the block. If my methods don’t suit you or if you’re lazy and just want hot stock picks fed to you (good luck!), then you don’t have to learn from me.

No matter which method or mentor you go with, know this: You can’t skimp here. You need to study like crazy and do the damn work. Don’t expect to make a million in your first week. That’s ridiculous! It takes time and hard work, period.

Just ask my student Tim Grittani. He lost money for nine months before turning the corner to profitability. He studied his ass off, watched all my videos and ended up turning his tiny $1,500 account into more than $6 million so far.**

The lesson here: It’s a marathon, not a sprint.

Trading Challenge

If you’re interested in learning from me, my top students, and a community of peers, then consider joining my Trading Challenge.

You’ll get access to tons of resources, including my every trade, so you can learn how to make trades for yourself. It’s also a great way to hold yourself accountable to your goals and to keep your ego in check.

It’s the ultimate way to learn from me and my top students while you also communicate with other investors, get tips, share your plays, and learn from others’ successes and failures.

When you go it alone, you risk making small-but-critical mistakes that deplete your profits.

Join us today and start learning from the experts. You won’t find promoters or other scam artists. It’s just a community of people who want to change their lives with the stock market.

Bottom Line

Learning to trade stocks has given me a life I could never have imagined when I was a kid.

This is a business where you can potentially make millions of dollars from anywhere on the planet. It’s amazing. Yes, it requires you to study and work your ass off — but you can do it from anywhere. The freedom facet is priceless.

If you’re ready to do the work, the good news is that the process of becoming a trader is quite simple and laid out for you. If you’re serious enough, applying for my Trading Challenge could be precisely what you need to help push you from where you are now to where you want to be.**

When I started trading, we didn’t have the mentors, educational resources or software that you can easily find today — so I’m serious when I say there’s never been a better time to start your stock market trading journey.

So what’s stopping you? Get to work!

Do you think you have what it takes to be a successful trader? Why or why not? Leave a comment below.