How to buy and sell stocks?
Online stock trading can be a bit scary for beginners. By reading this article, I would like to answer some of the questions you may have about stock trading online.
Tell your broker whether you want to go for a long time (your price goes up) or go far (fall in price) and you need to choose the appropriate action. Use to buy (when you want to go long) and sell (to close your long position in the stock). If you think the stock price is falling, you use short (sell your broker stock) and buy coverage (when you buy your broker stock to close this post).
In addition to the type of transaction you have configured, you need to specify the stock symbol and the number of shares you want to trade. Now your broker will want to know the deal you want. It all depends on the best price of your stock. Here are some advanced moves, but for our purposes, I will limit myself to three basic types of orders: market, limit and stop.
I suggest you do not use this stock option. It can be useful to buy stocks. I use this, and when the stock goes down quickly, I need to exit quickly. Market order will also come in handy when stocks are up in price and you need to move fast.
I use limit orders mostly with options, but it also comes in handy for stocks. Assuming you are looking at the stock, you notice that every time it goes to $ 10 it drops in price. When it reaches $ 6, it usually finds support and prices go up. Many investors have jobs and families, so they can not see the stock trading day. To solve this problem, you can place a limit order if the price reaches $ 6 to buy the stock. Set up another limit order (you bought the stock) to sell the stock at $ 10. Now you set up your transaction and forget it. The transaction will be executed as soon as the stock reaches the price you specify.
The third type of order is the stop order. If you own a stock and you want to limit the loss of your stock, you can do so with the stop order. For example, if you buy $ 10, you do not want to lose more than 10% of the stock if it goes in the wrong direction. To do this, you use a stop loss order. If the price drops to $ 9 (a loss of 10%), you set a stop loss order to execute your stock sell.
If you choose a trading limit order or a stop loss order, your broker will want to know you Of the order duration. Here you have two options, good to cancel and day orders.
Day only means that if the trade is not executed at the end of the trading day, it will be automatically canceled. If you want your execution order to continue for more than one day, use Cancel. These orders will remain in effect until you cancel them manually.