First of all, I have absolutely no experience buying or selling stocks. Right now, I only have experience with bank CDs (Certificate of Deposits). I have recently gained interest in buying into the S&P 500, but I do not know how to actually do it. I prefer to do banking and financial business online, so I was wondering if there was any online buy / trade service that I could buy S&P 500 stocks, or other stocks like Apple, and watch the accounts grow.. And are there buy / sell fees? Could I cash out and buy any time I want? Once again, I’m completely new to this, and any advice would be greatly appreciated.
Additional Information - After placing a stock trade online during non-business hours, does the sale/purchase finalize automatically? Lets say I placed an order online (E*Trade, Ameritrade, Fidelity, etc.) to buy some shares on a weekend after setting limit/stop price for it. Does the website, brokers behind it, or the system in general finalize the purchase right away for me when the market reopens especially at no more......
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2 Comments on “Complete newbie: How do you trade stocks?”
b2fnow 14th March 2010
This question is asked multiple times every day on Answers. Dont’ forget to use the Answers search box.
Your question is a little like "How do I do brain surgery?" or "How do I overhaul an engine?"
Until you learn the terminology, until you know the difference between a camshaft and a crankshaft, naming those items won’t help you.
Your question is too general, and you haven’t done your part yet. When you have a specific question about something you don’t understand, we can help. But nobody can teach you how to invest in a paragraph or two. Trading is yet another world than investing, like comparing brain surgery to overhauling an engine. You have to learn to walk the Wall Street walk first.
Look at your local library for books on investing, you’ll be surprised how many there are. Also there are ebooks online.
How to start trading online:
http://www.bernanke.cn/stock-trade/…...
http://www.stock-trading.jims-info.com/….
http://money.howstuffworks.com/……...
http://www.investopedia.com/
http://sharebuilder.com/
stockcharts.com
Beginner’s Books on Investing
"Which Is Better, Buy-and-Hold or Market Timing?"
"Do You Have What It Takes to Be a Market Timer
The Beginner’s Bible in Technical Analysis is:
Edwards & McGee"Tech. Anal. Of Stock Trends"
Droke, ClifTechnical Analysis Simplified
Kahn, Michael N.Tech. Anal. Plain & Simple
Kamich, Bruce M.How Technical Analysis Works
Lefevre, EdwinReminiscences of a Stock Operator
Lofton, ToddGetting Started in Futures
Lowenstein, RogerBuffet (Warren)-The Making of a Capitalist
O’Neil, William J.How to Make Money in Stocks
Oz, TonyHow to Make Money From Wall Street
William J. O’Neil. How to Make Money in Stocks: A Winning System in Good Times and Bad. He is the founder of Investors Business Daily
Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay
One Up on Wall Street, by Peter Lynch
Common Stocks, Uncommon Profits, by Philip A. Fisher
Stocks for the Long Run, by Jeremy Siegel
Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea
Trading for a Living, by Alexander Elder
From Riches to Rags, by I.C. Freeley
Develop an investment plan, test on a simulator like on investopedia.com. Then open a brokerage account, deposit funds, download the trading software or sign up online, and hit the button.
Yzrmoney 14th March 2010
The first thing you’ll need to do is set up a brokerage account where you can buy and sell the stocks (and other potential investments) you’re interested in. Brokers like Fidelity, Charles Schwab, E-Trade, etc. are good places to start. Be mindful though, of any hidden account maintenance fees; I can’t say for certain, but I believe the 3 places I mentioned have no-fee accounts.
Once you get your account set up (and some money deposited inside the account), you can go ahead and start buying and selling stocks. For individual stocks (e.g. Apple), you pay a commission for every transaction you make. For example, say you bought 100 shares of Apple- you would pay a commission to the broker for that trade. Then, a month later, you decide to sell 50 shares- that’s another commission fee. Then again, a month after that, you sell another 25 shares- that’s another commission, and on and on.
Commission fees can vary from company to company, by how often you made trades, and by how you actually place the trade. These days, just about everybody trades online (it’s quicker to do and less expensive) as opposed to over the phone.
With individual stocks, you can buy and sell anytime during open trading hours (6:30am-1pm pst) during the weekdays, federal holidays excluded.
I hope this helps you get started. Good luck with your trading!