How trade stocks online for beginners

As trade stocks

How to trade stocks?

When you buy him a major retailer near your home, you can easily tell how much a product checking the price on the shelf sticker or label. You know that price will not change during the few minutes trancurren between placing the item in your shopping cart and pay for it. However, online stock trading does not offer the same guarantees. Prices are constantly changing, rising and falling in real time as buyers and sellers interact. When the quote is more active, you can see that prices change in seconds. The rapid pace of online trade requires the use of special techniques. There are five common methods you can use to trade stocks online. Not all brokers offer all the options, however, fees may be higher for some types of operations, so you have to thoroughly research each option.




These are the top 5 ways to trade stocks:



Orders to market




Most instruments are within this group. You tell your broker you want to buy a certain number of shares at the current selling price or to sell their shares at the best possible price. The market orders are running almost immediately and are very simple, which means you often set apart pay the lowest commissions with such operations. Most individuals who are learning about the insdustria escojen such orders at least for their first businesses.



Limit orders

The limit order allows you to determine the price you are willing to accept for the shares that are sold or paid for the shares you want to buy. The broker could not execute a limit order unless the price fits your instructions. For example, suppose you are the owner of shares in Company A. The shares are currently traded at $ 50, but based on the latest financial statements of the company, your broker predicts that the price could fall lower than $ 30 per share. Although you could issue a market order to sell your shares, you are not sure that your broker predicció is correct. Only if he is right, however, you could issue a limit order and tell sell if the price reaches $ 40 per share. If not successful in selling all their shares before the price falls below $ 40, however, some or all of their shares could remain unsold and your broker will not sell their shares for a price below the established .




Stop Market Orders



Stop market orders shares several similarities with limit orders. Tell your broker the price at which it will sell their shares. When the stock reaches the stated price, the shares become a market order and can be run immediately. However, unlike limit orders, your broker can sell your shares even if the price falls below that specified. Using the same information that was used in the example under limit orders, suppose you had a stop market order with a price of $ 40 per share. The stock reaches that price, but before your broker execute the order, this will continue to fall and reach the $ 30 per share. With a market stop order, your broker can sell their shares at a price of $ 30. With a limit order, he could not sell the shares at the lowest price.




Stop limit orders



The limits of stop orders can be customized to meet your specific needs. The first step is to set the price activate your order. When the stock reaches the price, the order becomes a limit that will be executed at the limit price you choose. To illustrate, suppose again that you own shares of the company A. The stock is trading at $ 50, but you are worried that fall. You issue a stop order limit the trigger price is $ 40 and a limit of $ 30 per share. If the stock never falls to a lower price of $ 40, your order is activated and your broker will try to sell their shares. However, if the price falls below $ 30 the set limit, your broker will not sell its shares.




trailing Stops



Trailing stops are similar to limit orders, but rather to establish a fixed dollar amount, the limits are based on percentages or points. For example, assuming you pay $ 100 per share of the shares of the company B. You are willing to arriegar part of your investment, but you want to protect most of it. His emits a trailing stop that tells your broker to sell if the price falls more than 10 percent. Trailing stops are often used when trading individual stocks.








When you trade stocks online there are several options you can choose. These include:




The designation of lots: It is common for people to have a preferred share they buy in many different dates. Each set of shares purchased at the same time has a lot. If you decide to sell part of its shares, your broker might assume you want the band as much as you have for longer. However, tax issues make it more beneficial for you to sell what was priced higher or lower purchase. In this case it is necessary to specify how much you want your broker sells.




Setting time frames: You can enter commands that are good until you instruct your broker to cancel them, but you can also enter commands that are good only for one day. If the order is not filled, it will expire.




Placement rules: You can place a restriction on trade requires your broker to complete your order or not run at all. For example, you can make an "all or nothing" restriction on a purchase 1,000 shares of the company C. If your broker can not guarantee many stocks, not buy any




As trade stocks? Always diversify!



It is a proven fact in investment, diversification reduces risk. If you invest all your funds into shares of a company, you can lose all your money if the company fails. However, the same thing can happen if you invest in a single sector. For example, before the bubble burst "dot-com," many investors had invested all his money in Internet-related companies or high technology. The S $ P 500 and similar indexes covering a variety of sectors, ranging from financial institutions to industrial manufacturing. Diversification through buying individual stocks can be difficult, especially if you have a limktada amount of money to invest. Using one of the indices as a guide, however, you can invest in index funds or exchange-traded funds it easy for you to diversify




potential gains



You probably know that it is quite possible to acquire a lot of wealth with stock trading. In reality, however, is not probable covertir millionaire overnight. People who are more knowledgeable about how to trade stocks will tell you that the long-term consistency is the key to creating wealth. If you are able to start while young, you can build a substantial retirement account, even with modest gains. Realistically, I recommend you look at average earnings of 6 to 8 percent annually. Remember that the stock market rises and falls. One year, it is possible to achieve a gain of 10 percent, but next year can only be a imcremento 5 percent. When you make an average of two years, however, the increase is 7.5 percent per year. If you can achieve this average year after year and let your profits make up you could finally see that their initial investment starts to double every year. Start your online stock trading today and see what you can accomplish.