How to Buy Stocks
With proper training and experience, making money consistently from buying stocks can be simple:
1. Before you buy any stocks with your hard-earned money, you want to pick an investment strategy that fits your lifestyle, personality, and risk tolerance level. After you complete the Trade With The Pros course, you will find that you may like certain techniques that fit your way of thinking and your personal schedule. Start studying the stock market and then paper trade (that is making pretend trades and recording your results on paper or in a text document). Pay particular attention to the Trading Rules. Once you consistently making money using a specific trading strategy and are smoothly following procedures in the course, you should be ready to buy stocks using real money. Remember that paper trading is hypothetical whereas buying and selling stocks using your own money adds an important factor to the process—your own emotions of fear and greed.
2. Next, open an account with an online brokerage company. The five major online brokerage firms are Schwab, TD Ameritrade, Etrade, Fidelity and Scottrade. There are also a handful of other smaller firms. Any one of these firms will execute stock trades on your behalf with your directions given online or on their trading platform software. They will route your orders to an exchange's market for execution.
4. Send an initial deposit to fund your new online brokerage account. The minimum varies depending on the brokerage firm but it usually ranges from $500 to $2000. One specific trading technique that is thoroughly taught in the Trade With The Pros course is intraday trading, where you buy and sell stocks throughout the day repeatedly. If you want to use this powerful technique, you are required to have a minimum account balance of $25,000 but we recommend $30,000. The exchanges and SEC regulations have established these rules in the last few years.
5. Make sure you complete and return all forms to the brokerage company. They are required to report all of your transactions to the IRS so they will need your complete information.
6. Now the fun part. Using your online trading account, after you decide what stock you want to buy or sell short then enter your price, order type, and total shares to purchase. Make sure you follow the rules on keeping your position size small relative to your account size. This keeps your risk lower.
7. You will then receive an electronic notification (can be via email as well as a confirmation on the website or trading platform) that your order was filled and you will be able to see the shares in your account.
* Don't buy too much of one investment, so you be better able to deal with temporary setbacks; balanced portfolios increase in value in the long-term.
* Before you buy anything - stop. Watch and observe. Learn. Paper trade. Don't trust anyone's advice until you have confirmed that what they say works consistently. * Plan an entry, exit, and protective stop loss before entering any trade.* Consider trading mutual funds through ETF’s.
* When you buy a stock, you can choose to place a market or a limit order. The market order means you'll purchase the stock and whatever the stock price is currently. Limit orders allow you to pick a set price.
* Shop around for brokerage services. Each brokerage firm has its strengths and weaknesses. Your needs will vary depending on the type of trading that you do and it will take time to develop a style that fits you. You may find through research that some companies have more shares available for shorting, where another may offer larger discounts for high volumes of trades. Take into account trade execution, share availability, and the amount of fees involved.
Things to Remember
* In addition to the price-per-share that you offer for the stock, your broker will charge you a flat transaction fee, as well as an SEC insurance fee. You pay these extra fees when both buying AND selling a stock. Most firms charge from $5 to $10 per transaction, so a roundtrip (buy and sell) would cost $10-$20.
* Before buying stocks, make sure you have a procedure or criteria when choosing which stocks to buy. The Trade With The Pros course outlines procedures for scanning and screening for stock picks.
* Realize that people who promote a stock often do so because they have a financial incentive to do that. That is true whether it is a Wall Street analyst recommending a stock to buy, sell or short. Websites, newsletters, services, chatrooms, message boards, and sometimes purportedly journalists usually have some incentive to recommend a stock. As disclosed in our disclaimers, TradeStocksAmerica could have a stock before or after making a suggested stock pick or idea. It is extremely unlikely that this will benefit TSA because of our position size being small. We see our trend at TSA have less and less time to make a trade for our own accounts because of the increasing time commitment required to search for stock ideas or stock picks for our subscribers. In no way, at any time will TSA officers or employees intentionally issue any stock picks that may benefit our trading accounts and hurt our subscribers. This violates the very purpose and principles of why TSA was established. We want to give you every tool and opportunity that benefits you and your family.