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How to Buy And Sell Stocks Online - A Newbie' s Guide

By Edited Nov 13, 2013 0 0

This article is a simple guide if you are interested in an online stock trading. Making money in the world of commerce is quite challenging but also fun and fulfilling if you have done some research about it. You can make $30-$200 or much more in just a day or a few days when you trade them online. 

Well, luck also plays a part when you think about making money through online stock trading. There are steps to follow if you want to buy and sell them online in your spare time.



things you'll need:

  • Money
  • Time to research
  • Interest
  • Computer
  • Internet connection
  • Online stockbroker
    • 1

      Open an online trading account. Choose an online broker that you think has good services based on the research that you had conducted online. Select one and sign up. There are many online brokers that you can research on the internet and you only need to review what other customers say about each of them. Reviews from real customers are valuable when you plan to invest with any of these businesses.

    • 2

      Fund your online trading account. You really need a capital in order to purchase and make a profit online. After setting-up your online account, you'll need money to fund it. If you are new with online stock trading, a good starting point is about $400-$2000. Any amount lower than the ones just mentioned will make it a bit difficult to purchase them in large quantity. 

      Remember that the more shares you have of one of them, the more money you can also make. The downside of this is when you just purchased them and right after that the price suddenly drops, then you'll also lose money. Trading them online is also a gamble on your own investment if you currently have them on the market.

    • 3

      Study and observe the market for a few weeks. Do not be in a hurry to purchase and make a profit for your stocks online after setting-up your trading account. Try to get a better view on how the market moves up and down on a daily basis. Since you already have your online trading account set-up and funded, try to check the market if the NASDAQ, DOW, and S&P are all going up because if this happens then it could be your advantage to wait for awhile and observe. 

      Remember that they keep on changing. If you already have money in the market, rally days may be advantageous for you. Generally, rally days are also the days that you want to exchange or deliver them for money, but not a good time to purchase them. You may also want to see some online websites that give valuable information about online trading if you want additional information on how the market works. 

      When the market drops, it's called a pull-back. These are the days when you want to buy them because they are usually cheap and affordable depending on each of the stocks because each one varies when it comes to the price range. Usually, rally days are the days when people are selling too.

    • 4

      Purchase stocks that you have chosen in bulk. Remember that you still need to pay for a "trade fee" so if you predict that they will give you a good amount of profit then buy them in bulk. For example, try to purchase 600 shares, so let us say that it's trading at $3 a share today so the total cost for the trade is as follows: 600 shares @ $3 share = $1,800 + $10.00/trade = $1,810 total. 

      Try to place a "Limit Order" when you start placing your order. A "Limit Order" allows you to choose the price whenever you want to purchase or sell them online. This is an order placed with a brokerage to purchase or sell a set number of shares at a specified price and this allows you to limit the length of time for an order that can be ongoing before being canceled. A "market order" is when the market dictates the price whenever you dispose or purchase your stocks.

    • 5

      Since you already had placed your order, try to wait at least for a day or two. If you think that it is time to sell after a day or few days then place a "limit sell order" for your 600 chosen shares at $3.40. If you had succeeded in selling the stock then 600 shares @ $3.40 share = $ 2,040 - $ 10.00/trade = $ 2,030. So you had bought 600 shares at $1,800, then sold them at $ 2,040 so therefore you made $ 220 as a total profit.

Tips & Warnings

  • It is advantageous on your part as an investor to get a better understanding of how the market fluctuates before buying what you like to invest into.
  • You need to check with your retirement savings institution or banks for an online brokerage website. Some of these business institutions no longer require commission fees if you're already a member or have an account with them.
  • Only choose an online stockbroker that can provide you with all the needed resources to make any educated financial decisions. Some resources include educational materials, up-to-date news, real-time charts, different sources of high-quality tools plus a trading platform that is clear and user-friendly. A good online stockbroker should offer variety of strategies when you buy and sell those stocks in the market.
  • Remember to place funds on your recently opened brokerage account so that you can continuously purchase and make a profit online. There are several ways to place funds and one of the easiest and convenient way is to link your bank account to your new online brokerage account then start transfering the amount that you think will be most appropriate. Another way is to mail in a check to add money into your account or if your online brokerage works like a bank and has a retail location, then you can deposit money through your account.
  • If you have an online brokerage website and an approved account, try to use their screener and learn more from it. For example, if you already had selected a particular share or shares to purchase, simply select the "buy" option.  By the time that you had selected the "Buy Order" option, you'll immdiately become an investor online as long as you have the available funds in your recently opened account.
  • Newbies in this type of business might be the ones who are usually in a hurry to make a profit, calm your nerves and try to choose valuable stock exchange guides for your world of commerce ventures.  


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