3 Ways To Start Trading Without A Single Penny

by Andrew McGuinness     Jul 16, 2019

One of the most common dilemmas you’ll hear from friends, family and people all over the internet is “I want to get into stock trading but I don’t have any money.” This creates the notion that only the rich or those with a lot of disposable income have the capacity to start trading. One thing they often don’t realize is that almost every successful trader came from that same place and still managed. Trading 101 on a budget is almost the same as Trading 101 with millions in capital.

Let’s look at some ways to get into stock trading with a tight budget.

1) Start by practicing

If you’re tight on money and don’t want to lose any by investing, you definitely need to start by practicing. There are plenty of platforms that you can practice on for free, and this is the best way to actualize some of that trading 101 knowledge you’ve been amassing. The best way to approach this is by treating it as if you were trading real money that you own – applying the same principles you would if you were investing your own money. That way you can see which strategies work for you, which markets interest you and whether you have the chops to make real trades.

Practice accounts are a great way to experiment too. Whether it’s forex or regular stocks, all the data that they use is real and the results would be the same if you were using real money. If you do this consistently for a while you’ll learn a great deal about trading and how to do the research required to trade well, and nothing could prepare you better for the real deal than this.

2) Read up and Study

The internet is best resource you’ll have all your life as a trader. There are literally hundreds of places you can look for knowledge and training for. From podcasts to Youtube channels and ebooks, there are more free resources available than you could possibly consume. Take the time curate a selection of resources that are well-reviewed and cover all the bases of knowledge that you need to know about.

Now is by far the best time to get into trading. A decade ago there were so few resources available online, people used to rely on physical books to get their basic education in trading. There are some great books out there of course that any decent library should have on its shelves for financial education, such as The Intelligent Investor by Benjamin Graham or Security Analysis, also by Graham.

3) Save up for your brokerage account

You don’t need a lot of capital to start investing, but you do need some cash to begin with. There is no way to start trading without any money as you can’t buy something like stocks for free. Set aside some money each month to save up – it is highly unadvisable to start investing with your last savings. You should only go into the trading game with money that you can afford to lose – for instance, should the market crash and your stocks turn worthless, you won’t be living in poverty or struggle to pay rent.

A good place to start on a small budget of $1000 to $2000 is the penny stock market. Penny stocks are quite a bit cheaper and trade below $5 per share. There is significant profit to be made here as penny stock prices and go up or down quite quickly, which can make you quite a bit of money easily.

It’s also recommended that you look for a mentor, someone who’s been trading successfully for quite a long time. Perhaps a family connection or someone you can find on the internet to help you apply your knowledge in the most practical ways.

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