Need to Know How to Buy Stock Online?
Buying stock online allows you to play the stock market with convenience and efficiency. When learning how to buy stock online, many investors make the mistake of micro-managing their portfolio, because of how efficient and convenient Internet stock trading is.
Finding a good online stock brokerage often becomes a matter of finding the cheapest trade prices, so they can buy and sell as many times as possible.
That works for some investors, even to the point of day trading. A day trader buys and sells stocks all in one day, so that day trade investors buy a stock on a given day, then sells that same stock before closing of that day. The idea is to ride the wave, then get out before the next day’s wave hits, making more profit than the trade fees assessed by the online stock brokering firm. This can be profitable, but is a highly risky way of doing business, because Wall Street is a little harder to predict than the Hollywood Stock Exchange. Day trading is for the so-called experts.
Then there’s the rest of us.
Studying how to buy stock online involves learning how to make a stock trade through an Internet broker, which we’ll get to in a moment. But buying stock and hoping to make a profit involves learning how to evaluate stock prices and make educated guesses on which companies are likely to see their stock prices increase. I want to discuss that in this article, as well.
Buying Stocks Online
Buying stocks online is easy. All you do is sign up with a net brokerage, transfer money into your account and make orders to buy stocks. A market order tells your brokerage to buy (or sell) a stock at the market price, at the first possible instance. This is the basic way to buy and sell stocks online, though a market order can be more complicated and detailed than it sounds.
A limit order is, by its nature, more complicated than a market order. A limit order tell the broker to buy or sell stocks when they are within a certain price range, when it is within a certain time frame, or both. So if a stock appears to be rising, but it’s currently at $5 a share, you can set a limit order to continue buying that stock, until the price goes beyond $6.
Of course, you’ll want to set limits on the number of units of stock, or stocks, you want to buy. With each trade, you pay a trade fee, so keep that in mind when trading. Not only do you have to guess which stocks increase, but you have to be right enough of the time that your profits exceed trade fees. Consider trade fees like the “juice” or the vigorish in gambling.
How to Evaluate Stock Prices
Read as much as you can about other successful investors and how they made their fortune in the stock market. Take lessons from these people, such as Warren Buffet, who is currently the #3 richest man in the world, due to his skill in playing the stock market.
Bill Gates got his wealth by founding Microsoft and controlling the software market; Carlos Slim got his wealth by buying the Mexican telecommunications monopoly; then there’s Warren Buffett. Besides reading Warren Buffett’s essays, consider reading one of the 50 or so books about the founder of Berkshire-Hathaway, including best-sellers like The Warren Buffett Way by Robert Hagstrom or The Snowball: Warren Buffett and the Business of Life by Alice Schoeder.
Buy Sell Stock Online – Value Investments
Warren Buffett advocates “value investing”, meaning you find stock prices that are undervalued, according to some fundamental analysis of stock pricing before you begin to buy & sell stock online. By learning a few stock pricing philosophies and studying companies that interest you, you might find that some are undervalued for the price they’re selling at.
Value investment might not be as exciting as day trading, but it’s the sound way for how to buy stock online. Finding stocks that seem underpriced, buying into those stocks and then waiting is how the most successful investor ever made his fortune, so who are we to argue? In other words, most of your evaluations of stock should come before you ever put in an order to buy or sell, instead of buying and selling stocks, then immediately jumping out of the position, if the stock price takes a dive.
Buying Stock Online
In the end, you’ll learn how to buy stock online your way. My advice is to find an online stock broker that gives you good resources and rational trade fee charges, then slowly and surely build up your portfolio from the hundred to the thousands of dollars in investments, all the while learning the trends and how stock prices work. Study the ups and downs of the Dow Jones, the NASDAQ and the S&P, then start to make studied and rational decisions on your e-stock portfolio.