Trading stocks has quickly become one of America’s favorite pastimes. However, many people still believe that it is only for the elite or for the 1% of geniuses to take advantage of.
This isn’t true, almost anyone can start trading, and with enough time and dedication, they can become a professional that makes enough to live comfortably solely from trading stocks. But what path should someone take if they want to get into the stock trading business?
I talked with Roger Scott to get some answers to this question. Roger Scott has been a professional trader for over 25 years and is currently the head trader at WealthPress.
He has more than enough information and experience to shed some light on my questions. So without any further ado, let’s get to our interview and see what Roger Scott had to say.
Do you think anyone can become a stock trader, or does it take a specific personality?
It doesn’t take a specific personality as much as a particular mindset. A trader needs to be able to trade based on pure knowledge and leave emotions completely out of the game.
This can be difficult for people that truly need the money they are trading with. So if you are an emotional person, I’d recommend only trading with money you’re willing to lose, so if you see a slight downturn, you won’t immediately pull out of a good trade.
What should be the first move of anyone wanting to start trading stocks?
Their first move should be to read. Read as many books as you can get your hands on. Start with trading fundamentals and research until you know them like the back of your hand.
After that, move on to intermediate books, then advanced books. Never ever stop learning because you’ll start losing money as soon as you do.
There are so many resources, whether books, financial podcasts, websites, or classes, that will teach everything there is to know about trading. I highly recommend that new traders take advantage of these as soon as possible to build good habits and foundations.
Are there any financial barriers to trading stocks?
Yes, in order to day trade effectively and consistently, you must have $25,000 in your trading account. Some laws and regulations require this. Otherwise, you will be limited in the amount of day-trading you can do per week.
You cannot day-trade if you can only make three trades a week, this would be extremely dangerous and leave you holding stock way past the optimal sell date. I recommend having a bit over $25,000 since as soon as you fall below it, the limiting will start, and you’ll likely fall below your initial holdings at first.
Is there any planning that goes into trading?
No matter how new or experienced, every trader should come up with a trading plan every day and stick to it no matter what. A trading plan will stop you from making bad trades due to tilt and will prevent you from holding too long. Write out your trading plan every day, and keep it close by so that you stick to it.
Are there any trading tools that new traders should look into?
You’re going to want a stock screener that will take the guesswork out of trading. Your eyes can’t find every good stock that might be worth trading. A stock screener will parse bad stocks out and let you decide between ones with potential. Here are some of the best stock screeners of 2022: https://www.thebalance.com/best-stock-screeners-5185633
