So, you’ve become an expert at buying and selling stocks. You have that natural instinct that some of the best traders seem to have. As you ride the wave of power that comes from watching your money grow, you may entertain the idea of giving up your day job to trade full-time. Or maybe the best way to make the most of your talent is to help others successfully build their own portfolios. Either way, before getting started, it’s important to follow all of the required steps to give yourself the greatest chance of success.

Trading on Your Own

If your goal is to go full-time as a day trader, with no plans to take on clients and personally manage their portfolios, you’ll need a surprising amount of capital. Pattern day traders, defined as traders who initiate four or more day trades within a one-week period, are required to have at least $25,000 in equity in every account they run. As a pattern day trader, you’ll only be allowed to trade on margin accounts. If, at any time, your account falls below $25,000, you’ll be required to pause all-day trading until you’ve put enough money into the account to maintain that minimum.

One positive of pattern day trading, though, is that you’ll be allowed to trade at as much as four times your maintenance margin excess, whereas standard margin accounts are only allowed to trade up to double the margin excess. This can be good and bad, though, since it puts you at risk of a large loss.

Trading as a Business

Trading for others is a bit more complicated. You have to pass an exam before you can start trading for the public. If you’re selling annuities or mutual funds, you’ll need to pass a Series 6 exam. To sell securities directly, you’ll have to take a Series 7 exam. There may be other requirements for trading in specific industries. You should also consider becoming a member of Financial Industry Regulatory Agency, or FINRA, where you can register your business name and get the support you’ll need as you build the new business.

In addition to taking exams, you’ll need to check the requirements for getting a business license with your state or local agencies, along with submitting your information to the Securities Exchange Commission using Form BD. If you plan to sell stocks in more than one state, you’ll need a separate form for each state you’ll be trading in. There may also be special requirements for broker-dealers in your own state, so check on those before you begin accepting customers.