When deciding to start trading, there are a few things you must do and choices to make. The first thing you must do is choose a broker. Please examine these in detail as each broker has its own pros and cons and will ultimately define your trading experience.
There are a few things you will need to decide on before you start trading. Some of these are:
How much capital will you deposit?
What is your risk tolerance?
What timeframe are you looking to trade?
All of these questions will decide on what style of trading you will perform: shorter-term, longer-term, riskier instruments, risk-adverse instruments, etc.
The amount of money you deposit when opening your account is very important. To decide on how much you should start with, answer yourself the following questions:
How much of my savings can I live without direct access to? (Although most brokers have debit cards now, some do not)
How much of my savings am I okay with risking?
Would I still be financially well if I lost 'x' amount?
Your answer to these questions will decide how much you should deposit when opening your account.
Be mindful that a smaller account will be harder to manage since you will lack the capability of wide diversification. With a smaller account, it is likely you will be spending large portions of your account on positions, therefore having an inherently larger risk profile than someone with a larger account.
Your risk tolerance is a key factor on your road to becoming a successful trader. The standard rule of thumb for risk, is to never risk more than 1-5% of your account at one time. This does NOT mean to only trade with 1-5% of your account at a time. This simply means to never allow yourself to lose more than 5% of your account in a single trade. You should decide on your own, an amount of money you'd be willing to lose in any given trade. Timeframes are another part of risk management as shorter timeframes pose a greater risk.
You should also understand that your availability is also a factor in your trading style. If you can not trade for a majority of market hours, day-trading is probably not right for you. You should look to do a longer timeframe trades (swing-trading), lasting a couple days to a couple weeks. Trading very long-term a.k.a investing, is great for the risk-adverse. Since smaller timeframes attempt to make a profit on a smaller move of the underlying, it requires much greater precision in timing and also using leverage methods such as options in an attempt to maximize profits. This will also increase the risk, making it harder to be consistently profitable over the long-run.
We do not recommend any of our users to trade on timeframes less than 5 minutes, and anything less than 30 minutes should only be executed by experienced traders.
If you are trading more frequently, you should use smaller timeframes such as the 5 minute, 15 minute, 30 minute, etc.
If you are trading less frequently, consider using larger timeframes such as the 1 hour, 4 hour, and 1 day.