Buying 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.

Next : Stock trading advice