How to Buy Stocks

Now 2010 is around the corner that if you are looking for the good stocks to invest for the new year, check out this article from CNN.com.

These are not penny stocks but very good large cap stocks with high uptrend possibility in 2010 with the expectation of better economy.

I like the Master Card and Qualcomm. Especially the article mentioned about large growth of China’s cellphone population in the upcoming years which makes Qualcomm very attractive.

Qualcomm CEO Paul Jacobs recently said he expects the Chinese 3G handset market, for instance, to grow nearly ninefold over the next four years. By 2013, 3G subscribers are expected to reach 2.4 billion people from 830 million today — and Qualcomm will earn $4 to $8 on each new phone.

But very interestingly , most of these stocks are up yesterday and today. They may have been posstively affected by this article.

I would not buy these stocks yet , but just watch them for awhile. Make sure you do your home work before submitting the buy order.

Below prices are today (12/11/2009) prices.

• Master Card MA ($243.94 -0.18 -0.07%): Credit Card company
• Amedisys AMED ($40.62 0.15 +0.37%) : Health Care
• Qualcomm QCOM ($44.90 -0.66 -1.45%) : Technology. Cellphones chips and licensing
• Petrohawk Energy HK ($22.17 0.22 +1.00%) : Oil and gas exploration and production company
• Baxter International BAX ($59.50 1.43 +2.46%): Medical products
• Quanta PWR ($18.96 0.29 +1.55%) : Largest contractor in the U.S. electric power market.
• Salesforce.com CRM ($63.26 -1.43 -2.21%) : CRM solution as SAS (Software as a service)
• American Tower AMT ($40.04 -0.06 -0.15%) : Wireless tower operators. Rent them to the wireless carriers.
• Renhe :Hong Kong based company. Not available in US stock market.
• Vornado VNO ($69.66 0.88 +1.28%) : Real estate investment trusts

This is up to date prcie lists ( dynamically updates the price and showing the current prices and information.)
read more »

Most of the free stock quote services or providers available throughout the Internet are DELAYED stock quotes. For those cases, the stock prices are usually about 15 minutes delayed which is worthless data if you are keen on the up-to-date price movement and in this fast changing stock market.

So naturally any stock investor wants to have access to the real time quote services. People used to pay additional monthly fees to get the real time quote services. But there are ways that you can get the real time quotes free. – Google Finance and Yahoo Finance. Yahoo Finance was providing real time prices long time ago, but they stopped the service for a while , then back to providing real time data again after Google Finance debuted with the real time quotes.  I mean it’s just amazing that they can provide live real time stock price quotes for everybody. Thank you both!

What I like about Google Finance is that you can easily view the quotes of your stocks in the portfolio if you are logged into Google account. Of course, Yahoo also provides free real time quotes in the portfolio menu, but you will have to click few more times to access the screen.

Google Finance website also provides top financial news with the stock portfolio in a clean layout page, so you can clearly see what’s going on without any distraction.

Yahoo Finance is OK . But you will need to click on the ‘Real-Time’ button on the portfolio page. Yahoo provides portfolio
What’s amazing about these portfolio stock quotes listing is that the quotes are constantly updated with the latest prices by AJAX WEB technology.

However, there is a little problem with above real time quotes solution. It is quite inconvenient that you need to open a web browser to monitor the prices. Or you may want to be more discreet of what you are doing during the work hours that you may not want to show everyone in the office that you are watching stock quotes instead of working.

So my suggested solution is to use Google Desktop and use Google Finance Gadget. You may or may not already know about Google Desktop. It is well known for its desktop search function and the Gadgets – nice little programs that you can dock to the Google Sidebar or detach and locate it any where on your desktop screen.

You can enable Google Sidebar by selecting it from the option menu that you can access from the Taskbar icon.

Here is the Google Sidebar in action.

By enabling Auto-hide , you can conveniently make it appear or disappear by hovering your mouse on the screen border (edge).

By clicking on the Plus (+) button on the Sidebar’s top menu, you will be able to access ‘Add Gadget’ screen. Type in ‘stock’ in the search keyword field. You will be able to see many available stock related gadgets. However, I only recommend below two gadgets titled ‘Stocks’ and ‘Stocks gadget’. It appears these are from the Google and provides real time quotes.

To install, you can click on the ‘Add’ button located below the icon which appears when you move your mouse over it. Once you add the gadget, it will appear on the Sidebar. You can add the stock symbol by accessing the gadget’s option menu.

The ‘Stocks’ is the original version and I believe ‘Stocks gadget’ is the upgrade version. Basically they both provide the real time quotes and the same functions such as showing detailed stock chart and information in a new popup window when you click on a stock symbol. Also you can just drag these gadgets out of the sidebar to position anywhere on your desktop.

See below image for the gadgets in action. You can see that ‘Stock Gadget’ is little bit bigger than ‘Stock’ . For this reason, I prefer ‘Stock’ over ‘Stock Gadget’

So enjoy the real time stock quotes using Google Sidebar gadget. By the way, you may want to disable Desktop Search function of the Google Desktop especially your computer system is slow.

Here is the last word of advice before I let you go. Unless you are a professional day trader, try not to watch the stock quotes too often. Too much stock quotes monitoring is meaningless and bad for your health (especially for your heart) when the market is volatile and fluctuates severely.

Thank you for visiting How to buy stocks.

Zecco.com is an online brokerage service that is different from others. You can create a free account at Zecco.com to join the ZeccoShare the free trading community. You can get and share various users’ opinions and learn many important aspects of stock trading. Also see others stock holdings and the return results. It’s really fun. This guy ‘jonathan367’s stock portfolio performed 800% within the last 3 months. That’s amazing. You can view their actual holding statuses too.

Here are the quick overview of Zecco Online Brokerage Service.

Zecco.com provides …

• 10 free trades each month with $25,000 account balance or 25 stock trades per month.
• Generally they charge $4.50 per trade as commission for regular stock trading. While other stock brokers charges $7 or more per trade, this is really cheap.
• Options commission is $4.50 plus $0.50 per contract.
• Mutual Funds fee is $10.00
• There is no account minimum or inactivity fee. Great!

When you open an account

• You need your driver license and the Social Security Number. Do not worry about your private information being submitted. This is a standard procedure for all stock broker or bank account creation steps and all the submission will be done over SSL (Secure Socket Layer 128 bit) , so you don’t have to worry about it.
• There is no minimum deposit amount to open.
• The complete process only takes about 10 to 20 minutes.
• Direct deposit is available. You can provide bank information to transfer money to Zecco from your checking account.
• Do not ever borrow money (Margin account) to trade. There is a high possibility that you may get into trouble when the market is volatile.

Zecco.com also provides online community as I mentioned previously. You can get many valued information such as recommended stock symbol and other stock trading answers by checking out the forum and community.

That was my quick introduction about Zecco. Now I will show you how to buy stocks in Zecco trading platform. I hope you are already signed up with Zecco. Zecco allows you to select userid for the community access. When you first log in to the Zecco website, you will be directed to the main page of the ZeccoShare community. You can check out various articles and recommendation from other active traders.

Main screen after the first login.

If you want to actually start trading, you will need to pass another authorization. First, click on the ‘Trading’ button located on the top right hand corner. It will bring you to a new screen. Trading account number will be automatically displayed but you are required to type in the Trading Key. Trading Key is something like a password to authorize that you are the true owner of the account who can trade. It should have been set during the initial account setup.

Log-in again for actual live stock trading.

Below is the first screen after second log-in. There are lots of important information in the screen . Top of the screen there is a section you can quickly buy or sell stocks. And your account status and equity holding statuses are shown in simple charts so you would know the current status of your stock portfolio right away. ‘Total Account View’ shows the total value of your account with current value of equities and cash. ‘Positions chart shows’ the list of the current stock holdings with the initial purchase prices so you would know if you are wining or loosing. ‘Order Status’ chart will show the submitted buy or sell orders but which are not yet executed.

The first page of Trading Center

Now let’s try to buy a share. With the recent news on portable high tech devices such as iPhone and Droids , I am interested in Apples share. You can use the search tool to find the stock symbol of ‘Apple Inc.’ which is ‘AAPL’ . You can quickly check the current price and the charts of the stock symbol from the simple menu right below the trade order submission box.

Stock quote of Apple Inc ‘AAPL’ symbol

In the above quote screen, ‘AAPL’ was traded at $203.48. But then my buying power is only $137.11. So I am not able to buy even a single stock. So I decided to change my mind and selected Bank of America (BAC) who acquired Merrill Lynch last year. They say that the financial sector is still unstable and but I think BAC is a very good company with high growth potential. I am not just saying this. I really do think so. So the last trading price of BAC was $16.42 and I decided to buy 5 stocks of BAC.

Stock quote of Bank of America ‘BAC’ symbol

Transaction order submission menu

Here are the explanation of each item in the order submission menu.

1. Transaction: Buy , Sell, Short , and Cover. For now , let’s concentrate on Buy and Sell and stay away from the short and cover.

2. Quantity: number of stocks that you would like to buy or sell.

3. Symbol: Symbol of the company that you would like to buy or sell.

4. Order type: Type of the order.

• Market Orders: Market order is an order to buy or sell a stock at its current market price. This type guarantees the order execution but the price may not be guaranteed meaning the price may be significantly higher if demand is strong at the time of the order. Therefore this is little bit risky that price is not guaranteed.
• Limit Orders: Limit orders guarantee you the price but not the execution. You set the price limit to buy or sell. If the current price reaches the limit target price, your order will be executed, but may not be executed if the price does not reach the target within the trading day. (But then you can also set the duration to GTC  – Good till Cancel to make the order request lasts longer.)  I prefer limit order because you have the control over the trading price.
• Stop Orders: This is often used to protect your equities against sudden price drops (which has occurred to the many of the financial stocks on last October 2008). You can set the stop order price. And when the market prices reaches the stop order price, the transaction is executed at the market price. Therefore, the actual trading price may not be the same as stop order. If a stop order is triggered , it guarantees execution but not price.
• Stop Limit Orders: This is the same as stop orders except when the stop order price is reached, the trading will be done on limit order type. Therefore this time there is the risk that your order may be be filled if trading is active.
• Trailing Stop Orders: I will just skip this and do not recommend at this time.

5. Limit Price: Price need to be defined for Limit and Stop Limit order types.

6. Stop Price: Price need to be defined for Stop and Stop Limit order types.

7. Duration: Other than market order type, the other orders may take more time to meet the certain price requirements. Duration defines how long the order should be effective.

• Day : The order is only good for the particular trading day. If the order is submitted after hours, the order is effective only for the next trading day.
• GTC: Good till Canceled. The trading order is good until you cancel it or good for 90 days from the order submission.

8. AON : All or NONE. If checked, the all shares must be traded within one transaction and no partial execution is allowed. should not be divided the submission. Now there is a chance that your order will not be executed even if the prices met if this is enabled. But I had a question on this. If the order was filled by two or more partial transaction. Would I be charged for more than one commission fees? The answer is if that partial fills occurred within the same trading day, it will be considered one trade. But if the partial fills occurred over several days, each day will be charged as additional trades.

If you go back up and see the screen capture of the transaction order menu, you will notice that I selected Limit order type . I prefer to have control over my price and you can end up paying much higher price than you expected when buying stocks with Market order type during an active day. But if you are willing to sacrifice and take the risk , you should use Market order type especially when you need to acquire the stock fast. ( Maybe you heard a great news and need to buy the stocks before others find out.)

Now if you are satisfied, click on the ‘Review Order’ button. You will be directed to preview page. Inspect if the price and other information is correct. And click on the ‘Send Order’ to complete the order process.

Order preview page before the final submission.

The confirmation page after the final order submission.

Now that you have completed the submission. You will want to check the order status. Unless you have selected Market order, the order will not be executed unless the current prices meets your limit price. Also if AON(All or None) is enabled for the transaction, there is higher chance that your order may not be fulfilled. You can always check the order status by click on the ‘Order status’ menu on the left side menu right under ‘Trading Center’ parent menu. You can cancel it anytime by click on the ‘Cancel’ link. Once the order is executed, it will be listed under .Executions menu page.

You can check out the status under ‘Order status’ menu

That’s all about how to buy stocks with Zecco.com. Before I let you go, here is one more useful tip. Each sub menu screen of Account Overview menu (.Account Overview, .Positions, .Balances, .Order Status, .Executions, .History, .watch List ) has a ‘Set as default page’ checkbox. What it does is to let the selected page become the first page to be shown right after Zecco Trading account login. I wanted to monitor list of stock prices, so I added stock symbols under ‘Watch List’ screen and enabled the ‘Set as default page’. Therefore whenever I log into the Trading account, I get to see the ‘Watch List’ page by default.

That’s all for today. This is a short video from Zecco.com on how to buy stocks: http://zecco.s3.amazonaws.com/video/stock_order.html

Thank you for visiting How to buy stocks online.

Note: This article contains affiliate links to promote 3rd party products and services.

Here is a new stock quote tool I just finished developing. Try your favorite stock symbol one at a time. My favorites are BA,SU, and AAPL.

Stock Quote

Dow Jones Industrial

NASDAQ Composite

You should buy the stocks when the Market is crashed. It’s a done deal and making easy money , but to pin point the right moment is always difficult task.

For example, the 2008 October crash dragged the DOW point from 11,400 to 6,600(Early March 2009) . That’s about 5,000 points lost with in 5 months. Now the first sudden drop to 8,400 (-2,000 points!) occurred within the first few days of October. If you have decided to buy stocks at that time, you still advanced 1,600 points right now (Today’s DOW is 10,062). But if you have decided to stay until the March 6th which was the lowest point of DOW (6,626), you could have advanced about 3,500 points! That’s about 53% gain with in 7 months.

There are basically few important things to remember when playing this market.

1. You must monitor and wait for the lowest point of the technical indicators , trading environment , and trader’s sentiments.

2. And once you have the feeling you should buy the strong companies , not penny stocks of course, because only stongest companies can survive the storms. For example , AAPL (Apple) was $82 ,but now it’s $190. That’s more than double.

3. Be patient and don’t be scared and don’t follow the immediate market trends. During the bear market , the emotions are weak and can be easily scared, the market fluctuate too dynamically. Only the patient man can be the rich. Thinking of this as long-term investment .

4. Do not invest all of the money in your bank account. Just invest the amount that you are comfortable with.

I would not recommend for jump into the market at this point. With the past relay of bull markets for the last few months, analysts consider the market is possible to turn short term bear especially with DOW hitting over 10,000. They adivise to be cautious. However, you surely need to be prepared when the time comes.

If you do not have the online stock trading account, you should register and direct deposit some money now. Zecco.com is a great online stock broker with lowest ($4.50 or zero cost) commission. There is no Monthly Inactivity Fee, so even if you do not trade at all, there is no charge at all. So just join now and wait for the right time to come.

With the recent spike of the Dow Industrial Average, are you worried that you are missing the one of the lifetime chance of stock market? But don’t know how to start? In this tutorial, I will explain the details of how to buy stocks online.

Stock trading is not easy and it requires your time, money, and attention. Especially, if you are going to maintain your portfolio by yourself, you will need to study and read news daily. But stock trading is one of the investment methods with high ROI (return on investment) rate. And it pays off your hard work.

Hello, my name is Chris. I have started stock trading about 3 years ago. I am not an active or day trading stock trader but I learned many valuable lessons. I will try to explain what I learned about stock trading during the past 3 years.

Now, are you ready to buy some stocks? First step is to select which stock brokerage service to use for buying stocks.

Which brokerage service should I use?

Full-service brokers provides stock advice and alert to the customer when to buy or sell their recommended stocks. You can use Full service brokers. Commissions are typically based on a percentage of your purchase (or sale) price. They are very expensive charging $100 or more depending on which firm or which professional advisor you are using.

Discount brokers is the ones providing services at the lower price. They charge about $10 or $20 for a trade of 1,000 shares or less, or about one-third the price of full-service brokers on average.

Online brokers is services provided through Internet Website. You can buy or sell the stock by yourself. Therefore, you will need to research which stock to buy. The fee is varying from $0 to $15 a trade, this is the cheapest method of all.

Online brokerage service is good because you are in full control of the stocks portfolio. You can buy or sell any stock any time you want. You have all the latest stock price information at hand. You can compare and research company news and information pretty easily.

But the decision of which brokerage service to use should be made according to your needs. If you want to invest in stock market but want professional advice, you should look into Full-service brokers. To get a report on any broker, call the National Association of Securities Dealers at 800-289-9999. But if you want to start and have full control by yourself and you already know which stock to buy, you should go for the online brokerage service.

Personally I like to have full control so I like the online brokerage service. I will concentrate on how to buy stocks online using online brokerage service.

Practice Account

Before actually signing up for the real account, I highly recommend you to practice with virtual stock trading account. There are lots of free virtual stock trade practicing online services out there, but you can try updown.com for example. It’s fairly easy to start investing and get a feel of how the trading works. They initially give you virtual money of 1 million dollars. Also, if you score better than the S&P 500, you will earn some real money every month. (Winner will receive $500.)

Create the free account, research and buy some stocks, practice until you are comfortable and have confidence with your decision. Then you are ready for some real trading. Practice Investing Without Risk

How to buy stocks online

Signing up for online brokers

I currently have accounts with Scottrade and Zecco. Scottrade charges $7 fee and Zecco.com is giving 10 free trades monthly if you maintain $25,000 account balance, but even if not, it’s only $4.50 per trade. Account creation process is not easy as creating a simple free email account. It involves many steps but there are two major data submission processes.

First, your personal information. The required information is basically the same as when you sign up for a bank account. You will need to provide your name, address, phone number, date of birth, and Social Security Number too. I felt a little bit of uneasiness giving away my social security number, but this is required since they are required to report your trading history to the IRS at the end of the year. Yes, you will need to report your trading history in your tax returns. And if you have earned any money from trading, you will need to pay taxes.

Second, you will need to transfer money from your other checking or savings account to the trading account. So that you can buy stock with that money. Most of the online brokers have direct deposit service. Once you confirm the banking account is yours, you will be able to transfer money in and out of your bank account to the online broker account. In order to confirm, you can give them the password of your bank account for quick confirmation, or wait several days for them to deposit random amount of money to your bank account, and then let them know the actual amount to confirm the ownership. Since I was uncomfortable providing the online access information of my bank account, I chose the second option and waited two or three days. The confirmation process may take some time, but once it is setup properly, money transfer is very easy.

So the whole process may take 3 or 4 days to complete. Once the account is ready and the money is deposited to the broker account, you are ready to buy some stocks.

How to buy stocks online

Selecting which stocks to buy

Maybe this is the most difficult part of the stock buying process. If your friend gave some inside company news and you already know what to buy, then you can skip this section.

Research is the most difficult, time consuming process. That’s why many investors rather depend on the professional stock advisor and use full-service brokerage services. However, I believe it is much better to have full control of your portfolio and be able to make decision fast.

First, you will need to watch the financial news closely and search for the bad news. Why the bad news and not the good news? The basic stock trading strategy is buy low , sell high. You won’t get anywhere when the stock is already hitting the ceiling. You will need to buy QUALITY stock when they are at their lowest price range. Many people get emotional and jumpy when bad news come out and selling the stocks. But as the life itself is just like a boat in the wild sea, the stock price is sometimes down but they will get eventually back to high prices as long as the company is solid.

Also, you will need to learn how to read technical indicators. There are popular RSI(my favorite) and MCAD. I use RSI 7 (Relative Strength Index for 7 days) method which I learned from Mr.Bill Cara ( a successful stock trader who shares valuable information in his blog ). When all monthly, weekly, and daily RSI7 are below 30, it is interpreted as OVER-SOLD condition. And when the values are coming back over the 30, it is called accumulation zone which means that you should start buying the stocks. In the contrast, when all RSI7 values are over 70 , it is called OVER-BOUGHT condition. When the RSI7 values headed below 70 , it is called distribution zone which means you should start selling the stock.

Also many people use the 200 day, 50 day, 10 day moving average value to decide when to buy the stock. For example, in a bull market, you buy the stock if the stock price is below 10 day moving average since the price tends to go up, it is a good idea to use 10 day instead of 50 day.

If you don’t have any clue which stock to research. Take a look at my RSI7 page where all the current monitoring stock symbols are listed. They are all quality stocks suggested by Mr. Bill Cara.

How to buy stocks online

How to Buy Stocks Online

Once you are ready and know which stock to buy, you can buy the stock during the regular hours and during pre-market/after hours. Regular market hours are from 9:30 AM to 4:00 PM EST. Pre-market hours are from 8:00AM to 9:30 AM EST. Ater hours market are from 4:00 PM to 8:00 PM EST.

It is said that you should wait until 30 min after the market opening to see the markets trend because right at the beginning of the market , it is possible that the prices fluctuate especially there was special news in the morning. Also you can participate in the Pre or After hours market without any restriction, but beware that there are not many people trading at this hour, so you should only trade if you know what you are doing.

Now login to your online broker account, let’s say Scottrade. Once you log in click on the ‘Trade’ Tab. You will be enter the order information in this page. You should select whether you want to buy or sell . And number of shares and stock symbols. Then, you will need to select the Order type. The options are Market, Limit, and Stop. These are important terms, so I will explain.

• Market: When you enter a market order you are buying the stocks at the current available price at the time you enter the trade. Your order will be executed immediately at real time prices. But since you don’t have the control, sudden spike or drop of the price will cause unexpected results.
• Limit: With limit method, you can specify the price you want. It is highly recommended that you use this method instead of Market order since you can have the full control on the price. However, limit order or stop order are not guaranteed to be executed. If the prices do not match, the order will not be executed during that day.
• Stop: This is something like a trigger that will buy or sell the stock at the market price when the stock reaches the stop price. This is usually used to protect the gains.

I usually use Limit order type. Also many people suggest to set a stop loss to sell stocks about 10% lower level, but there is some risk on setting stop loss when the market is highly volatile. The price can drop temporarily and can come back by the next minute.

Also you need to remember that sometime the money that you can use to buy stocks is limited. It takes 4 days (need to confirm exact days) to clear money when you sell stocks, these amount become unsettled funds during that 4 days. Although you can buy different stocks with this unsettled funds, you will not be able to sell the new stocks until the funds become settled. So if you are thinking of short selling stocks, do not jump in while the funds are unsettled.

How to buy stocks online

Somethings to remember

1. Only invest the amount of your extra saving that you are comfortable with.
If stock trading affects your life in any way, you should stop trading. Do not over invest of your money. It’s always possible that anything can happen.

2. Do your homework and Do not get emotional.
Do your homework and do not trade until you are confident before making any decision. Many traders become emotional and sell their stocks when the price is at the lowest level. And buy the stocks when the price is hitting the ceiling. Eventually they will loose all their investment if they keep doing this. You should set a plan and make a decision according to your plan.

3. Tax report – Wash Sale.
What’s wash sale? If you are trading once in a while, maybe this will not be your concern. However, it’s important to know. Wash Sale is a Stock sale item which you lost money but you can’t report as loss in the tax report if you bought the stock again 30 days before or after the sale. This is one of the IRS rule, so make sure you remember this rule. If you trade very often and sold out your negative performing stocks, do not buy the same company stock again within 30 days if you want to report the loss in your tax report.

How to buy stocks online

Conclusion

I think the most difficult process in buying stock is to decide which company stock to buy. It requires time and money for the research and you need to learn how to read market. But if you are prepared and have a proper investment plan, it is highly rewarding investment strategy. And online stock brokerage services will make it easier for you. If you believe that you want full control of your money, I say you should go for the online brokers. Don’t hurry, take your time. After all, it’s your money.

Good luck everyone.

P.S. I recommend Zecco.com. Zecco provides quality trading platform with the lowest fee per trade $4.50 and free trades under some conditions.