Buying Stock Online Guide

You are interested in buying stock online because you know that you can make a lot of money with it.  That is why you are here, right?  Well, fortunately for you, here at the Buying Stock Online Guide we will strive to teach you as much as we can about buying stock online and making money in the stock market.

The stock market is all about making money.  You buy stock in a company, wait for the value to increase, sell for a profit, and collect periodic dividends.  Of course, buying stock can be a lot more complicated that this, but this is generally how it works, and this is the general information we hope to give you.

Start with an Education

When it comes to making money, you want to do things right, and that means educating yourself before you put your money anywhere.  I don’t necessarily mean go out and get a degree in finance, but by all means, if you are that passionate about it enough to make it a career, go for it.

What I am saying is that you teach yourself.  You could sign up for a couple of courses, read lots of books, and of course, surf the net for information.  That is how you have stumbled upon this site, and we will try out best to help you out as a beginner as best we can.

Get yourself Further Prepared

You need to study and learn first, but once you have that first step down, you still have further preparations to do.  First and foremost, you need money.  As they say, “you need money to make money”, and with buying stocks, it is no different.  You need to get as much money as you can to invest.

I would recommend that you put aside a certain amount of money each and every month to put towards investing.  Start saving that money even while you are just learning so that you have a nice large amount to start with once you are ready.

Next, you need to set yourself up with a brokerage firm.  Since you are planning on investing online, you will need to set up an account with a brokerage firm.  I use and recommend Sharebuilder.com.  I have used them for several years and have been very happy with them.  They offer affordable trades, excellent security, and great customer service.

Once you are ready to get started, start researching corporations.  Hopefully you have learned how to do this while you were studying and learning.  This is an incredibly important step when buying stock online that you cannot miss.

Practice makes Perfect

Before you get to the point where you actually invest your own money, you should start to get your feet wet.  What I mean is, invest with ‘fake’ money until you are ready for the real thing.  You can do this with Wall Street Survivor, a great fantasy stock market simulation game.

You can trade stocks in the real stock market but with fantasy money.  You can even win real cash prizes which is a great bonus while you are just learning.  Hopefully you will use any money you win to invest later in the real stock market.

Of course, remember that you will eventually start investing your own money.  You can keep using the practice game for super risky trades, etc. but I would recommend investing in the real stock market with real money as soon as possible so that you actually make money from those fantastic stock picks you have found yourself!

Take Action and Keep Moving

As I said, you need to take action.  The practice and preparation is very important, but what’s more important is actually investing.  If you spend years learning and preparing, you are giving up all that time and a lot of money you could have made.

Depending on how much time you are able to put into this each week and how much you already new to begin with, you should start investing as soon as you can.  For example, if you are an absolute beginner, you are able to put in 8 hours per week, and you are a fast learner, it might take you 2 or 3 months to study, a month of practice, and then you can get started.  Hopefully, it won’t take you longer than 6 months to actually start investing.

They say shareholders never buy stocks when they are at a low value and never or seldom sell them when they are high. The fact is that we never know how low the value of a stock will be; likewise, we are never sure how high the value will go in the course of time. It is just the speculation of prices. Hence, what is the best time to buy stocks and what is the optimum level when we should sell them?

In layman’s understanding, we need to remain updated of stock prices all the time. Not only remaining updated will matter, we also need to remain connected with the system. Whether you purchase stocks online or through any stockbroker, you need to make the final decision. For that, you have to be abreast with the system of stocks. The fundamental is that when the share prices are low, you should buy them and when they are high, just sell them. It is easy to comprehend but difficult to execute.

Suppose, the current share price of XYZ Company is $50.00. Now, it is up to you whether you wish to buy it or not. Maybe, you are confused about what to do. You wish to buy but not at this price, which you think is very high. Hence, set a limit to it. Ask your broker that when the price of a particular stock falls below $40.00, it should be immediately purchased and when it again goes high, say $50.00, it should be sold. In this way, you can manage your stock holds. You can also do it online placing your orders at your desired prices. You can do the same with various stocks in this way and it will be easy for you too as you need not worry about it.

Nonetheless, you never know how high your stocks prices will go in order to sell them off. Here too, you can set your own goal. Say, you have bought a particular stock at $20.00. The current price of this stock is running at $22.00. You can sell it, but you may need to see how high it soars. Therefore, set a target here. If the stock price touches $23.00, you will sell it. Next day, the price shoots up to $24.00. Reset your target. Now if the share price goes below $23.50, you will sell it or else you will keep it on hold. Again, the price further goes up to $25.00. You can reset your goal again. Now if the share price goes down below $24.00, you will sell it off. In this way, you can manage your share and you will not lose much. You will, anyway, gain as the current price of the stock is above your purchase price, which was $20.00. This trend is called trailing stop.