How to Become an Independent Stock Trader
Becoming an independent stock trader is in many ways less stressful than relying on a broker. You're always in control of where you put your money. The trading fees are low, so you don't have to worry about having your gains gobbled up by trading churn. To become an independent stock trader, conduct some research, formulate a trading strategy, practice using a stock market game and finally open an account at a brokerage firm and start trading.
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Instructions
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Educate yourself on the basics stock trading. Learn the crucial definitions that you'll need to know when trading. Read blogs, newspapers and magazines directed at traders to get a better feel for the variety of strategies. Eventually, you'll get a better sense of whether you want to be a long-term investor or a short-term trader and what kinds of strategies excite you the most. Good websites for learning basic terms and strategies include Investopedia and Stock Trading to Go.
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Pursue a specialized area of stock trading to increase the chances that you'll be able to develop a coherent, principle-based strategy that you'll be able to stick to while you trade. If you enjoy learning about options trading, for example, then read some books about options. Avoid falling into the trap of using research as procrastination by limiting the number of books that you read before you start trading to three or four. You may want to work with a tutor, take a seminar or find a mentor to assist you in developing your trading style.
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Open a virtual stock market trading account. Practice the strategies that you've learned as you would if you were trading an actual account. It may be tempting to take larger risks than you'd be willing to if you were trading real money, but try to get yourself into the mentality of actual trading to give yourself better practice. Trade with a virtual account for at least one to three months to get a better feeling for trading.
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Open a brokerage account at a brokerage firm that has a fee structure and customer service that meets your needs as as a trader. Pay close attention to what fees are like for high-volume trades or when making many trades in a single day. Find out if the brokerage gives you access to margin accounts if you intend to trade using borrowed funds or conduct short sales.
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Continue trading, educating yourself as you go. Learning about multiple types of securities can enhance your trading strategy. For example, you can use options to hedge your stock trades or use them to enhance your gains.
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