How To Start Investing Online

Investing in stocks online is quickly becoming popular these days. It is faster and more convenient than traditional stock trading. Read on to learn how to invest in stocks online.

Step 1: Open an Account

The first thing you have to do is set up your account with a discount brokerage. You can trade stocks through a discount broker, but they won't give advice. Some of the best online brokers are: TD Ameritrade, Options House, and Scottrade. They will need a void cheque to have access to your bank account, and photo identification. It is quick and easy to set up an account, and you will save on commission fees. You'll have to do some research since there are some brokers that require you to invest a minimum amount. To protect yourself, get a written disclosure of all the fees you might be charged.

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Some e-trading platforms allow you to open up a practice account. This will let you learn how to buy and sell stocks using fake money. It’s a good way to learn how to invest in stocks online before using your own money.

Step 2: Pick Your Stocks

Study the stock market and see which stocks are doing well. When choosing a stock to invest in, look for a company that you trust and are familiar with. Index funds and mutual funds are good choices since they contain a number of stocks from different companies. It's a good idea to diversify a little bit, so as not to ‘put all your eggs in one basket.' If one stock does poorly, then at least you won't take a big loss as you have other stocks to depend on.

Step 3: Make Your Order

How you place an order depends on which online platform you’re using. Some of them use a type of order ticket, but others have a web form for you to fill out. The information you’ll have to put on your order includes:

· The company’s ticker symbol

· The stock exchange the company trades on

· The number of shares you’d like to buy

When you’ve made your order, you’ll get a confirmation with the total cost including commission fees. The online trading company will keep you informed of the order status.

Another thing to consider is advanced options, such as a limit order and a stop loss order. A limit order will tell your broker the limit of which you’re willing to pay for a stock. Your order will not be filled until the stock you’re interested in goes below a certain price. A stop loss order is put in place for exactly that purpose, to stop a loss of money. If your stock dips lower than a certain price, your stock will automatically be sold.

The Bottom Line

Now that you’ve learned more on how to invest online, you can go and buy yourself some stocks. Just remember that even though the process is simple, it is still real money that you’re investing with.

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