Can anyone let me know what do I need to start out?
Learn more about bitcoin. Especially the legal aspect. Your post gives me the impression that not only have you not done much research, but you're looking at bitcoin as a get-rich-quick type thing.
If I'm not mistaken all I need is a bitcoin wallet and some funds to start trading USD for Bitcoin, correct?
Basically, yes.
How do I get a wallet?
The exchange you're trading at (Bitstamp, Coinbase, BTC-e) will provide one for storage. If you get a lot of bitcoin you should move it to a external wallet, preferably a offline one.
