How to buy stocks
So you want to start buying stock ?, but don’t know where to start? Here are a simple few steps to getting started and understanding the world of stock trading. While it sounds difficult at first, it actually is easy once you get the hang of it. To start off, you have to make a broker account with your local exchange, this will give you the power to buy and sell your stocks.
Then, you should do research on a stock that is worth investing in. it is best to invest in companies that are high in value and are well settled. It is not recommended to buy stocks in new companies or ones with volatile prices every day. In my previous posts i have clearly explained about undervalued stocks and stock market for beginners so you have a look at it to get a clear idea
When you have chosen a company to invest in, you have to see how much you have to invest. Depending on where you live, this amount could vary in figure but mostly is in a few 1000’s to start with, and most broker accounts are allowed to buy a 100 shares minimum with a quota on maximum stock you are allowed to purchase. When you begin trading. You will see the options of “bid” and “ask”. Much like forex, the value at which you buy the stock, will be lower than its resell. In Bid, you could sell a stock for $10. But it’s ask would be $10.01. Hence, if you buy a 100 stocks of a company, you are going to look at the “ask” and pay $1001 for a 100 shares in a company. And if you sell the stock, you will make back $1000, with a loss of a $1
Once you have bought your stock. You will look at the stock’s market order. The market order, is the price of the stock that fluctuates, this value will always be flexible and changing to highs and lows. So, if you bought a 100 shares for $10.01, the market order can push the stock to $10.10 and you end up with your shares totalling $1010 in value, earning you a $9 profit. If you wish to study the trend more carefully, you can take a chance and wait for the stock to further rise and once the stock price goes to a point where you feel comfortable with the profit, then you can sell your stock for money before the stock falls back to the price you bought it for, otherwise known as the “limit order”.
Your focus should lie on trying to make back as much as you can from your original investment to avoid a loss. At the start, you should be wise with your investment and look towards taking as little as risk as possible with your finances. Once you are settled and aware of how the stock markets work, while making menial profits or some loses here and there, you will be able to better understand the stock market and work towards maneuvering them better and avoiding pitfalls on the trade floor.