Guide
Start here: four moves before your first real trade
Most beginners start with a strategy. We start with what keeps you in the game long enough to need one.
Quick answer
Learn how markets and costs work, size every trade from a loss you can afford, check that the firm you use is registered, and practise before risking real money. Regulators warn day traders often suffer severe losses in their first months [1].
Key points
On this page
Why start with risk instead of strategy?#
Because the early months are when beginners lose the most. The SEC warns that day traders typically suffer severe financial losses in their first months, and many never become profitable [1]. A strategy only matters if you still have an account to use it with.
That is why this route puts the boring parts first: what you are buying, what it costs, how much you can lose and who is holding your money.
What are the four moves?#
- Understand the market
Learn what moves prices, how orders work and what the spread costs you before fees. Begin with trading basics.
- Size every position
Pick the most you will lose on one trade, measure the distance to your stop and let the formula set the size. See position sizing and the calculator.
- Practise before real money
Use a demo account or paper trades with a written plan. Record each trade, the reason, the size and the result, and review them before switching to real money.
How much money should you start with?#
Only money you can afford to lose. The National Futures Association calls this risk capital: money over and above what you need for necessities, emergencies, savings and long-term goals [4]. The SEC adds that day traders should never use money needed for living expenses or retirement [5].
What should you check before opening an account?#
| What you are using | Where to check | What to look for |
|---|---|---|
| UK broker or crypto exchange | FCA Financial Services Register [2] | The firm is listed and the contact details match the Register |
| US futures, forex or crypto derivatives firm | NFA BASIC [3] | Registration and any disciplinary history |
| US spot crypto platform | FinCEN money services business registration [3] | Registration as a money services business |
Mistakes beginners make in the first month#
- Believing quick-profit adverts
The SEC tells investors not to believe advertising claims that promise quick and sure profits from day trading [1].
- Skipping the register check
Sending money after a call or social media message without looking the firm up yourself.
- Trading with money you need
Using savings or borrowed money turns ordinary losses into real hardship [5].
Frequently asked questions#
Do I need to learn charts first?
No. Charts help you describe what price did. They do not tell you how much to risk or whether a firm is safe, which matter more at the start.
Is crypto easier for beginners than forex or stocks?
Not in terms of risk. Crypto prices can move sharply, and in the US spot crypto platforms are not required to register with the CFTC [3], so check what protection you have before depositing.
How long should I practise before using real money?
There is no official answer. A practical test is whether you followed your own written rules on every practice trade, including the losing ones.
The bottom line#
Work through the four moves in order. Understand what you are trading, size every position from a loss you can afford, check the firm on the official register and practise with a written plan. When you are ready, read the risk management topic in full.
Sources
Education only. This page is not investment, tax or legal advice. Trading and crypto can lose you money. See our risk disclosure.
