How to Begin Stock Trading

You can begin to trade stock easily.

The stock market offers a genuine opportunity for anyone who has mastered it. Success at trading stocks requires knowledge and experience. It can take a long time before one can master the market. However, beginning to trade stock is fairly easy and quick. Knowing how to begin stock trading will help a lot when you first start your trading career.

Things You'll Need

• Start-up capital

Instructions

1. Pick a broker by deciding from among full-service brokers, money managers, online/discount brokers or discount brokers with assistance. Consider commission rates, financial vehicles offered, trading options, minimum deposit and customer service quality when you pick your broker. You may use broker comparison tables offered by some trustworthy sites such as Barron, Smart Money and NASDAQ to help make your decision.

2. Open a stock trading account. Based on your risk appetite, you can choose between cash (less risk) and margin account (more risk). If you want to save on taxes, open an IRA account instead of a normal trading account . Most online brokers offer online account opening applications. Some brokers still require paperwork you have to complete and mail back to them.

3. Deposit money by check, wire transfer (with a small fee), free ACH direct deposit, stock certificate or a transfer into your trading account from another brokerage house. Based on what available deposit methods your broker offers, select the method with which you are most comfortable.

4. Research and buy your first stock. Use the research resources your broker offers, or use many free trustworthy resources such as NASDAQ, Amex, AOL, Yahoo! Finance and MSN Money to find good stocks. Use your investment knowledge to analyze each stock. Make your first trade by placing an order.

Tips & Warnings

• Apply for a demo account to test your strategies and gain experience in the stock market before putting in real money. Most stock brokerage houses offer a free practice account. However, Wall Street Survivor provides the most popular stock simulation.

• You can learn about stock trading online at various trustworthy sites such as Investopedia, MSN Money Central, and The Motley Fool.

References

• Investopedia: I want to start buying stocks. Where do I start?
• Investopedia: 10 Tips For Choosing An Online Broker
• The Motley Fool: Cash Account vs. Margin Account: What's the Difference?
• Investopedia: Margin Account
• The Motley Fool: 60-second Guide to Opening an IRA

Resources

• Nasdaq: Online Brokers---Best Online Stock Brokerages
• SmartMoney: SmartMoney 2010 Broker Survey
• NASDAQ: Stock Market---Stock Quotes---Stock Exchange News
• MSN Money Central: Personal Finance and Investing
• Wall Street Survivor: Stock Market Game and Free Online Paper Trading