Stock Market For Beginners | How to buy stocks online

How to buy stocks online

How Do I buy stocks online is the most common question that most stock investors ask. The reason is simple as there is ease of buying the stocks while sitting in front of you computer and easily punching in the trades. 

Well the procedure of buying the stocks is the same as earlier going through a broker in the offline world. The only thing that has changed is that the broker is now a company which has an online website via which you can trade easily and this website is your entry into the stock markets.

Before I begin the step by step guide process about buying stocks online there is some things that you will need to know especially about brokers. 

Full service brokers charge more fees and give investment advice and also have a investment advisors that will call you if they have a tip and also they will advice you on tax planning as well as other aspects of your portfolio. So you can open an account with a full service brokerage firm sitting in front of the computer. Since these are full service brokers the fees will be heavy as they provide you with specialized service. 

Discount Stock brokers are the brokers that will have a website where you can log on and set up an account. In these discount brokerage firms there are no investment advisors and no tax advice. They do not even tell about which stock to buy. Some of these have stock research reports sent by email to all the clients. That is the max they will do. Of course this is the reason they are called discount brokerage houses and they will charge less. Their commissions are very less on each trade. 

Tips before you open an account

Make sure that to check if they allow international stocks to be traded.

Also check if the brokerage allows you to trade in penny stocks.

Also check what the margin requirements for the broker are.

Also check if they allow pre-market trading and after hours trading

Check if they allow the options and future also with this account

Check is they allow mutual funds to be bought from the same account.

But stocks online for free is not a reality but you can definitely have the initial 10 or 20 trade free. 

Some brokers allow systematic purchase plans to be set up for a specified amount each month. Make sure that you check this facility.

 Step by step guide to open an account

Fill up the form

Do not gloss over the options account. Sign up and you may end up using this later.

Set up direct debit facility for funding the account with some amount. A lot of brokers have requirement of a minimum amount.

Once the account is funded then you can start trading 

Things that you should know are market order, limit order as well as good till cancel.

The main thing that you should be doing is the stock research to buy stocks yourself. That can two forms and these are picking the stocks based on the fundamental analysis of stocks or the technical analysis of stocks 

Do not time the market

If you are thinking that you will wait for the appropriate time to buy a particular stock and sell a particular stock then you need to understand that there is no clear answer to the question about when to buy stocks . 

Build a portfolio.

I will suggest that you should diversify and build a good portfolio of stocks based on the best stocks that you can buy. This diversification will be achieved by identifying various stocks in variety of industries and that will help to build a good stock portfolio.

 Get knowledge about stock exchanges.

 Now most of these discount brokers or the full service brokers have the option for you trade in either exchange that is the NASDAQ or the NYSE. Each of the stock exchanges that you have will have specific set of technology and each ahs its own index. Before you invest understanding the dow jones industrial average as well as getting know the definition of nasdaq is a must.

 Good luck with your trading.

Related posts:

  1. Trading Stocks – How & Where to Buy or Sell?
  2. Buying stocks online – How to choose online stock brokers
  3. Online stock trading
  4. How to buy stocks myself? – Small investors use discount brokers
  5. Discount Stock Brokers – Select the Best

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