How to trade stocks for beginners without fear

If you are wondering how to trade stocks for beginners but don’t know where to start, this is the perfect resource for you. Although this introduction is primarily intended for beginners, veterans and seasoned professionals can still learn something new.

This article and video describe how to execute a trade using an online trading platform. If you are looking for information on trading strategies such as day trading, swing trading and long term investing and you’ll find a whole world of information here at Investment U.

The video above also shows the information on stock trading for beginners that is included in this article. So feel free to watch the video and refer to this article for reference as well as to learn how to trade stocks.

Your beginner’s guide to trading stocks

Trade stocks with online brokers and investment apps

The first thing you need to do when learning to trade stocks is access a licensed broker, an online brokerage firm. or a trading application As Robin Hood. In the investment tutorial video above, Ben Dressing, Oxford Club Research Director, uses Investopedia trading simulator, which allows you to learn the ropes of trading without actually committing real money.

While most online brokerage houses have unique platform designs, they all generally have the same essential characteristics for placing a trade online. So, the online broker you are using might look a little different than the one seen in the video above, but should work the same.

Stock symbol search

When a beginner decides which stock to trade, he must know his stock symbol. For example, let’s say you have decided to buy Apple stock. You can search for the ticker symbol for Apple on your online trading platform, or you can find it by searching for “Apple” on a site like Yahoo Finance.

The stock symbol for Apple is AAPL, we will therefore enter this into the trading software in the “Company” field.

Quantity of shares and share prices

The next thing a newbie to the stock market has to decide is how many shares of the action you want to buy. A good rule of thumb is not to place more than 4% of your portfolio in one position.

We are going to buy 19 shares of Apple in this example.

One of the most important things to consider when buying a stock is its purchase price. Here are some specific definitions related to the purchase price that you should know:

  • Last prize TThe most recent price at which Apple sold.
  • Offer What people are willing to pay for the stock.
  • Interrogate TThe price at which people are willing to sell stocks.

You never want to pay more than the asking price. And the general rule is to go between the asking price and the asking price.

Types of stock orders when trading stocks

The next decision a newbie has to make in determining what kind of order we would like to place. If we choose to buy the share with a market order, it will likely be filled at a price close to the asking price.

If you put a limited order, you can set the price at which you want to buy the stock. The limit price sets the maximum you are willing to pay. If the stock is trading at $ 212, but you don’t want to pay more than $ 211, you can set a limit order of $ 211. Then you run the trade only if the stock falls to or below that price.

Likewise, if we set the limit price at $ 210.18 as shown in the video, this is the highest price we are willing to buy the stock at.

The duration of the order

The next thing to do for a newbie in the stock market is to define duration Trade. If you select the good until canceled option, this tells the brokerage that the price we set is good until we manually cancel it. In other words, it keeps the order valid until it is filled and the stock is actually purchased. Or until we cancel the order.

You can also set cancellation dates. So if you select agenda, the order will be valid until the end of the trading day. At this point, if the system does not make a purchase, the order will automatically be canceled.

Finalize your stock trade and final thoughts on how to trade stocks for beginners

We can now preview and review our order. Some brokerages will have a commission fee for the transaction, and this will be reflected in the total cost.

It will display your estimated total cost. If you need to change or cancel your order, now is the time to do so.

You can now place your order.

Go to your account overview and view your orders where you can see your filled and opened orders. You will see your order in the list of open orders until the order is completed.

These are the fundamentals you need to know to know how to trade stocks for beginners. Of course, this is the easy part. Now you will need to do your research and decide on the best stocks to buy. And that’s where the real fun begins.

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