If you’re planning to enter the trading world, you'll need skills and money to get started. But although you can start trading with enough money, and minimal skills, it’s impossible to trade if you have no money and just skills.

So before you get started, you must know what you need to pay. If you’re only thinking about the capital you’re going to use to start trading, it’s not enough. There are a lot more things you should include in your budget.

In this article, we’ll break everything you need to pay for as a new trader.

1. Brokerage Account Fees

The first step is to look for a broker. Once you’ve found the ideal broker, you can open a brokerage account, and pay for the fees. Usually, brokerage account fees include maintenance fees, commissions, and transfer and withdrawal fees. These are needed so that you can start your trading journey. However, you can also access your free demo account first if you don’t want to pay yet. Meanwhile, the rate per brokerage account often depends on the broker and the type of account you’re planning to open.

2. Trading Platform Payment

Although many brokers offer free trading platforms, such as TradingView and MetaTrader, there’s also a possibility that you’ll pay for the use of a trading platform, especially if you prefer using one with advanced tools. Usually, premium accounts come with real-time updates, better user interface, and other advanced features.

Free trading platforms also offer the same features, but they’re not as advanced as the ones you can get if you opt for the premium platform.

3. Market Data and News Subscriptions

You can also have access to free market data, and news, but they may not be as accurate and timely as when you avail of the premium subscriptions. When you do, you can access level 2 data, wherein you can get to know about the usual bids and asking prices of underlying assets. Additionally, there are news feeds and advanced economic calendars with detailed analyses that can help you identify market sentiments and other factors affecting market volatility.

4. Education and Training Costs

Whether you’re a beginner or a professional trader, you should consistently improve your trading knowledge and skills. In doing so, you also need to pay for educational costs. You can afford online tutorials or courses, buy guides and books, and apply for mentorship programmes.

Availing of education and training is also a great investment that you can use to improve your knowledge and skills.

5. Initial Capital and Margin Requirements

Many brokers require a specific amount of initial capital for your trading account. Even if it’s consumable, you should still ensure that you have a minimum amount of deposit before you start trading. On the other hand, if you’re trading on margin, you need to allot a budget for the interest rates, which varies depending on the broker.

6. Trading Tools and Resources

Even if you avail of the premium trading platform, you still need additional tools and resources for a more successful trading experience. Usually, professional traders opt to avail of tools such as charting software (to improve the analysis of the current market conditions), backtesting tools (to test trading strategies based on historical data), and trade journals (which can help analyse and keep track of your trades).

7. Taxes and Regulatory Costs

Trading profits usually come with various types of taxes. Depending on your country, there are capital tax gains which also depend on whether you’re gains are short-term or long-term. In addition, there are also professional fees (for financial advisors), and transaction taxes (in some cases, included in the brokerage account fees).

8. Investing in Technology and Infrastructure

Of course, your trading experience won’t be successful if you don’t have the tools and equipment, or your trading set up. Nowadays, you can access your trading account using various devices, including desktop computers, laptops, tablets, and mobile phones. So, if you can invest in at least two, such as a high-performance computer and mobile phone, it can be a great start.

But aside from the devices, you also need a stable, high-speed internet connection. You shouldn’t be interrupted, especially when placing trades or making adjustments.

9. Risk Management Tools

When creating risk management plans for your trades, you also need to allot a budget. For instance, if you’re planning to adjust the position size of your trade, you should have enough money to do so.

Final Thoughts

As a beginner in the trading industry, it’s essential to understand the cost of everything you need before you start trading. Once you understand each of them, you can plan, and budget accordingly. At the same time, you should be aware of certain adjustments you need to make, depending on the market condition, broker, and other factors, so always have additional funds for emergencies.

We hope this article can help you get started with your trading journey. If you want to share your thoughts about this, don’t hesitate to comment below!