How to Open A Trading Account

This learn trading guide will show traders how to set up their account so that they can begin to trade indices. Before registering a trading account there are various factors that traders should consider before taking this step.

To open a stock trading account, traders need to find an online stock trading broker & then they can setup their account with the broker that they choose. Once a trader opens this stock trading account the trader will then use it to place trades in online stock market & the profits & losses that they make when trading will be accounted for in this stock trading account.

A trader will need to consider the following factors when opening a trading account:

Regulation of Online Broker

Before opening a trading account traders must first know that they should only choose to trade with a regulated stock trading broker. In trading there are hundreds of brokers, some are regulated and other that are not. A trader must do due diligence when selecting a broker and check the regulation license details of the broker they want to trade with. Remember some brokers which are not regulated will write an tutorial on their trading website about indices trading regulation and link to this article - if a trader is not careful they will be tricked into thinking that the broker is regulated, make sure to check the license details of the broker and you also can confirm these details with the regulatory authority regulating the broker.

Trading Leverage

Traders should consider the trading leverage offered by the broker when it comes to opening & accounts. With trading leverage a trader controls a big amount of capital while using little of their capital. Trading Leverage is one of the reasons why a trading is very popular because traders can make a lot of profit from indices trading using little of their money.

A trader should therefore consider the trading leverage given by a broker some online brokers give 100:1 and others as high as 400:1, with trading leverage 400:1 a trader who deposits $1,000 can borrow $400 for every $1 that they have & therefore the trader using this trading leverage will control $400,000 which they can use to open trade positions with.

Stop Out Level

This is where a broker will close all the trades of a stock index trader if the traders accrues losses beyond a certain level. The best brokers will implement their stop out level at 20 % and at this level there is minimum chance of a indices trader's transaction getting closed. However, there are brokers who are not very straight & these brokers will set the stop out at 100 percentage% and with this level the likelihood of the trader’s transaction getting closed or stopped out are very high. A trader should make sure they open an account with a online broker setting the stop out at 20 %.

Learn More Lessons & Topics:

Trade Stock Indices

How to Open A Trading Account

Regulation of Online Broker

Trading Leverage

Stop Out Level