How to Open a Brokerage Account

How to Open a Brokerage Account for Beginners

Learning how to open a brokerage account is an important step that many new traders need help with. First, choose your trading style. Good day trading brokers are SpeedTrader and Interactive Brokers. TD Ameritrade is good for overall trading. Next, apply for an account and then fund it. Within a few days, you should be able to start trading.

  1. A simple process on how to open a brokerage account:
  2. Choose your trading style. Day Trader, Swing Trader, Long Term Trader.
  3. Choose trading preference. Stocks, options, or futures.
  4. Research company fees and pricing.
  5. Determine if lower fees outweigh platform abilities.
  6. Deposit money into your account.
  7. Set up your account with the technical features you like.
  8. TD Ameritrade and bigger brokers are good for swing/long-term trading.
  9. Interactive Brokers, LightSpeed, SpeedTrader, and CMEG are good for day trading.
  10. Practice paper trading before trading with real money.

There are many great brokerage firms to choose from. Watch our video to learn how to choose the right broker and discover our favorite brokers.

Finding the right brokerage account doesn’t need to be difficult. Start by deciding what kind of strategies you’d like to employ. Do you want long, short play options? You can do all three or focus on one.

Deciding how to use it helps determine which kind of account and which broker to use.

There are many brokerage firms to choose from as you learn how to open a brokerage account. TD Ameritrade, E*Trade, Fidelity, Robinhood, Charles Schwab, and Interactive Brokers,

When you want to open a brokerage account, the first thing to consider is what type of investor you are. Are you investing for retirement, or will you live off these investments?

How to Open a Brokerage Account


If you’re opening a cash account because you want that money now, you don’t get the tax breaks an IRA would have. Taxes on profits as well as dividends may apply. However, you can withdraw money from there any time you’d like.

Cash accounts are also eligible for margin. As a result, margin lets you borrow money.

If you want to short, a broker like Interactive Brokers would be a good one to open an account with. Read our Interactive Brokers review. If you’re looking for options, TD Ameritrade, as well as Charles Schwab, is a great broker to consider.

As stated earlier, how you want to use your brokerage account will help determine which firm to go with. There are many ways to profit, and you may have to get approval for some, such as options.


Commissions seem to be considered when learning how to open a brokerage account. Fees from brokerage firms indeed vary; some are cheaper than others.

Paying a higher commission price isn’t necessarily a bad thing. The less commission you pay, the more bare-bones a broker can be. As a result, commissions pay for upkeep and having the best tools at your disposal.

Compare commission fees as well as incentives. See what you’re comfortable paying. Although, if paying a higher commission isn’t something you can handle, you may not want to be trading at this point. Brokers may also work with you to lower commissions. Call customer service and ask them. You might be surprised.

Trading platforms are a make or break in trading. Many brokers offer different trading software along with mobile trading apps. A slow platform will hurt you. A mobile app that doesn’t work well is detrimental.

A broker that requires $2,500 or $10,000 might not work if you’re starting.

As a result, this cuts down on trying to pick a broker. The good news is some options give you a bang for your buck. Many great brokers don’t require a large minimum to open a brokerage account.

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An application is required to open a brokerage account. You can apply online in most cases. They may require you to sign something if you request margin or options.

Have a fax machine handy. They usually ask for a faxed copy of a driver’s license. If you choose a broker with offices in your area, you can head there and supply that information.

Once you’re approved, the fun begins. You get to fund your account. Now you’re up and running. Before you go crazy trading, use a simulated account. This is important!

Final Thoughts: How to Open a Brokerage Account

Learning how to open a brokerage account is just the first step. A broker that allows paper trading is so important when you begin stock trading training for beginners. Simulated accounts allow new traders as well as seasoned ones to practice. Even a seasoned trader can learn a new strategy.

Trading is emotional. Winning gives you a high but losing brings a crash that can cripple some. Finding a broker that allows you to practice teaches you how to deal with those emotions without blowing up your account.

Trading isn’t just about buying and selling. The market is a war between buyers and sellers that form candlesticks. Those candlesticks, in turn, form patterns,

Patterns are what traders trade. As a new trader, you’ll lose your money to seasoned traders if you can’t find and read patterns. A paper trading account is a great tool for learning the ins and outs of trading. It’s so much more than buying and selling.

Frequently Asked Questions

How much does it cost to open a brokerage account? It varies among brokers. A lot of brokers require a minimum amount to open an account. As a result, this can affect which platform you choose. They range from $0-$10,000 minimums. Advanced day trading platforms require $25,000 minimum.

  • TD Ameritrade - best overall brokerage account for beginner traders.
  • Interactive Brokers - next best after TD Ameritrade.
  • Robinhood - good for basic trading and zero commissions.
  • E-Trade - decent for basic trading.
  • Fidelity - good for mutual funds and investing.

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