How to Start Trading: An Open Introduction

How to start trading is a question with a cheap answer and an expensive one. The expensive answer is to open an account, fund it and learn from the losses. The cheap answer is to learn first what a trade costs, how large a loss you can take and what you will do when you are wrong, and to write it down before the first order.

What should you know before your first trade?

Four things. How your broker handles an order. What the trade will cost you in commission and spread. How much you will lose if the price moves against you, and where you will get out. And whether you are trading a plan or a feeling. This course covers each of them in plain terms.

Why do most new traders lose money?

Studies of retail brokerage accounts find that most day traders lose money over a year, and that the losses come mostly from costs, from trading too often and from position sizes too large for the account. None of those is a lack of talent. All of them can be fixed before you start.

Where does this course lead?

It is the free starting point of the trader path. The Foundation Certificate in Trading is the next step: a set of courses on markets, orders, charts, costs, risk and the psychology of trading, with no programming.

What you will be able to do

• Explain how the six stages of a trade create counterparty risk and why central clearing houses exist to guarantee settlement.
• Identify the five revenue streams embedded in zero-commission brokerage accounts and evaluate how payment for order flow affects actual execution prices.
• Calculate viable starting capital by subtracting a living buffer and near-term liabilities from liquid assets, and verify that cost-share ratios remain workable for the chosen asset class.
• Compute the break-even pip or tick requirement for any trade by summing spread, slippage, and overnight financing before setting a profit target.
• Place stop-loss orders beyond the asset's average true range to avoid premature exits caused by ordinary price noise.
• Apply the 1% risk rule to derive exact position sizes before every trade and enforce a daily loss ceiling that halts trading when reached.
• Build a written trading plan with defined entry conditions, circuit breakers, and a systematic review process to evaluate decision quality independent of trade outcomes.

Syllabus, module by module

1. How Markets Actually Work

   Explains how financial markets function, the roles of hedgers, speculators, market makers, and institutions, the six stages of a trade from order placement to settlement, and why prices remain partially but never perfectly efficient.

2. Brokers and Accounts Explained

   Covers how zero-commission brokers generate revenue through payment for order flow, spread capture, margin interest, securities lending, and service fees, and how order routing decisions affect the prices traders actually receive.

3. How Much Capital You Actually Need

   Derives a realistic starting capital figure from liquid assets, living buffer, and near-term liabilities, debunks common myths about minimum capital requirements, and establishes viable minimums by asset class using cost-share mathematics.

4. What Every Trade Actually Costs You

   Calculates the full cost of a round-trip trade by layering spread, slippage, commission, and overnight financing, and shows how transaction drag permanently reduces the capital base available for future compounding.

5. The Stop-Loss: Your First Line of Defense

   Demonstrates the asymmetric mathematics of loss recovery, explains how stop orders execute and where gap risk causes them to fail, presents academic evidence from nearly a century of market data, and shows how to place stops beyond the asset's normal noise range.

6. Position Sizing and the 1% Rule

   Applies fixed-fractional position sizing to produce exact share and contract counts, links stop-loss distance inversely to position size, and introduces daily loss ceilings and half-risk protocols for account recovery.

7. Building Your First Trading Plan

   Guides students through writing a complete trading plan with defined entry and exit rules, market conditions, position sizing formulas, circuit breakers, and a systematic review process for ongoing improvement.

8. Placing Your First Order — and What Comes Next

   Walks through order types, execution mechanics, trade confirmation documents, and the construction of a journaling habit anchored by pre-trade records, MAE analysis, and MFE analysis.

What every course contains

Every paid course comes with the first seven and the certificate, whichever level it sits at. The proctored exam and the credential come when the course is taken as part of a Certificate, Diploma or Fellowship. Everything is self-paced: the material is yours to study in any order, at any hour, for the whole of the license.

1. Workbooks. Written to train the thinking patterns and the important concepts of the course, with worked problems and the reasoning behind each answer, so that you learn to think the way the subject is thought.
2. Audio edition. Focused, well-presented recordings with explainers and examples of the material, made to be interesting, relevant and entertaining, so that the general subject can be learned away from the desk.
3. Notes. Pre-produced notes with every fact the course relies on, written out in full, so that nothing has to be transcribed from the films or the audio.
4. Cheat sheet. One sheet with every important learning concept of the course on it, to keep beside you during the work and to revise from before the exam.
5. Named sources. Every fact in the notes names its source, the paper, the book or the dataset, for anyone who wants to dig in further.
6. Explainer films. Focused films, in the style of the sample films on the catalog page, that walk through the most difficult concepts of the course with visual explanations of a high standard.
7. Transcript. A full transcript of every film and every audio recording, searchable and quotable.
8. Proctored exam. Taken as part of a Certificate, Diploma or Fellowship, the course ends in a proctored multiple-choice questionnaire, with a pass mark of 60% and three retakes included. A course taken on its own is assessed by its coursework and has no exam.
9. Verifiable certificate. A certificate of completion that a third party can verify: an employer sends the code on it to the credentials office and receives written confirmation of the course, the date and the result.
10. Credential of the program. The Certificate, Diploma or Fellowship of the program, track or path the course belongs to, awarded when every course in it is passed. Which one depends on the program you choose.

Assessment

Not assessed. Study notes, a cheat sheet and a workbook come with every lesson. Open courses are free, have no exam and award no certificate. Read how certification works.