How to Trade Stock Online
Trading stock online has been made easy by the advent of online discount brokerage firms which sell do-it-yourself investment packages. While some websites focus mainly on education and research about the stock market, others combine both research and the opportunity to buy and sell stocks online.
- Difficulty:
- Moderate
Instructions
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1
Research and familiarize yourself with the different financial information websites out there that will give you necessary information on particular stocks and their companies. Motley Fool, Bloomberg and Yahoo! Finance are good examples. There are a number of other good sites such as Investools, which require a membership fee.
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2
Research and decide on an online brokerage firm. There are a number of brokerage firms out there - E*Trade, ShareBuilder, TD Ameritrade, just to name a few. Costs range between $4 and $20 for each purchase or sale of stocks completed with one of these discount online brokers. ShareBuilder is a favorite brokerage because it is dollar-based, not a share-based. You can automatically invest a fixed amount of money every month to buy a particular stock or group of stocks over time. There are no minimums. ShareBuilder was recently acquired by ING, the Orange Savings Account people.
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3
Determine your investment objectives. Did you just come upon a chunk of money and decided to invest it in the stock market? Are you investing for the long term or are you looking to make quick cash with periodic trading? Is this part of your retirement plan? Your objectives will dictate how you buy and what you do with the stocks you buy.
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4
Buy your stocks. After you are confident with the extent of your research and the online brokerage you have chosen, it is time to start buying stocks. Most of these brokerages allow you to link a checking or savings account to your brokerage account. Starting small with an automatic investment strategy of investing a fixed amount periodically is one way to go. Before you attempt to sell, take into consideration fees, taxes and penalties.
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Tips & Warnings
Get professional help if you think you still need it. If you are still confused after your extensive research it might be time to get the advice of a professional financial or investment advisor.
