New to Trading... Am I taking the right steps?

[damn_river]

I have $1000 to make an initial investment. I was going to use Etrade as a broker, but it seeems that Ameritrade is more popular on this forum. Is there a reason for that?
I am a novice by all means and plan on doing some simple investing. If I were to buy shares of ETFs with this money and add shares on a monthly basis, would it be worth the cost of buying shares? It almost doesn't seem like it to me, but I have never done any investing outside of a savings account. Is there a more successful strategy when trading ETFs? Would you recommend a different way to invest the money like mutual funds/ index funds? Also from what I am finding on Vangaurd and Fidelity, $1000 is too little of an initial investment for their mutual funds.
-dR

[gvibes]

I would think that the transaction fees would destroy any gains from buying a couple ETF shares per month. If you want to open a Roth IRA (at Vanguard, at least), all you need is $1000.

from the website:
"For most Vanguard funds, a minimum initial investment of $1,000 per fund to open a Roth IRA."

[GeorgeF]

I tend to think of trading as buying and selling the same investmemt. I think you are talking about investing.

freetrade.com has no commisions but you need $5000 to start. I think vanguard has a $250/month plan or something like that.

If you do not have enough money, that is the problem you need to work on. People hate being told that but you should work on your earned income. Your best investment might be things that improve your earned income perhaps education, better work cloths, tools of your trade, job consuling, drinks with the boss after work, I don't know what else. The fact is $1000 no matter how well invested is unlikely to amount to much money in the long run.

[DWarrior]

I've wanted to start investing for a while also, but being a broke college student makes it very difficult. Meanwhile, I've invested as much as I could into books, and hoping to save up about 10K by the end of this summer to start investing.

With $1,000, there is really not much "trading" you could do, as the commission will eat up any % (think of it as rake in a poker game, in the small-limit games, the rake eats all your profits). Also, you will be restricted to putting all your money on one stock each time, which is a bad idea. I've personally seen one of these idiots blow half of his $1000 (birthday money, figures) trading options in one trade.

Also, as GeorgeF said, I think you're referring to "investing" rather than "trading". Investing is more long-term, while trading is short-term. From what I gather, most traders (day-traders) don't really know what they're doing, they're just in because it's the "in" thing to do.

As for the $1000, someone suggested that I put mine in an index or DRIP (re-invest dividends) directly with a company, while others suggested that I should stay out until I save up enough (10K) and invest in books and other things that don't yield direct profits (like gvibes suggests).

[Your Mom]

[ QUOTE ]
I tend to think of trading as buying and selling the same investmemt. I think you are talking about investing.

freetrade.com has no commisions but you need $5000 to start. I think vanguard has a $250/month plan or something like that.

If you do not have enough money, that is the problem you need to work on. People hate being told that but you should work on your earned income. Your best investment might be things that improve your earned income perhaps education, better work cloths, tools of your trade, job consuling, drinks with the boss after work, I don't know what else. The fact is $1000 no matter how well invested is unlikely to amount to much money in the long run.

[/ QUOTE ]

FYI, freetrade.com is an Ameritrade brand.