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How to Buy Stock in the Stock Market

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          Stock market trading is not for the faint of heart. There are many different ways to go about buying a stock in the stock market and different ways to select your stocks. Luckily we live in a day and age where it is much easier to trade stocks with the advent of online internet stock trading. With an online brokerage account one is able to look up a particular stock they are interested in buying and purchase that stock on the open market. You can either purchase the stock at the market price or even set a limit order to purchase the stock at a predetermined price. Also it is cheaper than ever to open online stock trading accounts. Usually stock accounts can be opened with deposits of less than $500 dollars in most cases. Follow the advice below if you want to learn how to purchase stocks in the stock market.


Step 1

Open an online trading account. There are many different companies that you can use such as Scottrade, Etrade, Zecco, and Ameritrade among others. Each of these accounts can usually be opened from the convenience of your own home in front of you computer. Just go to the company website and click on the links to open a new account. You will have to fill out general information about yourself as well as any previous stock market trading experience you have if any. You most likely will then attach a banking account to your stock account so that you can transfer money back and forth. You also have the option of mailing in a check for the minimum money amount needed to open your account. If you have any questions you can call the help lines and speak to a representative.

Step 2

Now that you have opened your stock market account you should familiarize yourself with the user interface of your particular trading platform. Most online brokerage accounts have separate screens where you can view individual stock information, use real time charts and graphs that show how the stock price is moving, and even screen stocks based on certain criteria that you have determined for yourself. There is also a separate screen for purchasing and selling your stocks. Click on that page and familiarize yourself with the different options for purchasing and selling stocks as there are many. You can either buy or sell a stock outright on the open market at whatever the current market price is for that particular stock as set by the market makers. Or you can buy or sell with a limit order which is basically setting the price at which you want to buy or sell your stock. Your stock will go on the open market to be bought or sold at your limit price if it is hit. If the price does not activate then you can try another price. These types of orders come in very handy if you are trading very volatile stocks such as penny stocks that have wild price swings and fluctuations in their daily trading values. By setting a limit order you are ensuring that you know exactly the price at which your stock may sell or be bought at. If you do a regular market order and the stock price swings wildly during the time it takes your order to execute then you may be faced with purchasing a stock at a much higher price than you had anticipated.


Step 3

Now you need to determine what type of trader you are and how to figure out which stocks to buy. There are many different types of stock market traders depending on your goals as a trader such as whether you want to make steady income, are speculating for huge profits, or want to trade penny stocks or not. Long term traders typically buy stocks and keep them from anywhere between days to weeks to years or longer. They typically look for slow steady gains in price of the stock over time. Many times stocks will offer dividends in the form of a percentage of the price of the stock that are paid out to you quarterly and deposited in your account. You can choose either blue chip stocks such as stocks typically traded on the NYSE or tech stocks such as those traded on the Nasdaq. There is no sure fire silver bullet way to make money off the stock market and choose the right stocks. There are many different ways to trade and you will need to do your own type of research and come up with your own way to trade in the stock market. For example some people trade off of volume accumulation which is buying a stock when it is under massive buying or positive volume accumulation which causes a temporary surge in the price of the stock. Other people buy stock based on news they see on television that may push the stock higher. You should start trading with small amounts of money at first until you come up with your own method of trading before making moves that may net you big losses.



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