AUG 24: How to Begin Online Stock Buying and Trading

by David Jenyns on August 24, 2006

Brokerage Firms

Everybodyís doing it and now you want to too. Where do you begin? Itís really not hard at all but for your first time you should play it safe until you learn the ropes. First, youíll need to open an account with an online brokerage firm. Sounds sophisticated doesnít it? You can work it in a couple of times over dinner if you time it right. ďOh, did I mention I spoke to my broker today? He feels I should stay right where Iím at.Ē Now wasnít that fun?

Most of the online brokerage firms have a minimum requirement for opening an online stock buying and trading account. When I was first initiated, I chose Sharebuilder precisely because they didnít have a minimum requirement. However, I will leave you to secure your own broker.

Depending on the firm, it will cost a few dollars to make your first buy. Mine cost $4 because I opted for the basic freebie account. The accounts you pay for usually give you so many buys or trades for free.

Choosing A Stock

I chose my stock by looking around my home and started looking at the company profiles of the companies Iíd already invested in. Next, I needed to find the stock symbol for my online stock buying and trading venture.

I Googled. I learned a lot on MSN about online stock buying and trading. They have a comprehensive site about money and the stock market. I learned what to look for in a company and how to interpret much of the data I would find. I followed my stock everyday or almost every day. I had a paltry 2 shares so I didnít get stressed no matter what was happening that day.

What was an eye opener to me was learning that when the stock went up or down a measly 5 cents and I saw where stockholders had bought or sold thousands and thousands of shares, it made that paltry 5 cents look pretty good. That fast. Thousands and thousands of dollars.

Commissions

Be careful when you start trading that stock. It didnít cost me much to buy it but to make a trade cost $15.95. Itís considered making a trade when you say, ďOk, Iíve had enough for now. I want to pull my money out. The reason that is considered a trade is because in order to pull your money out of your account, you have to sell the stock. That $15.95 was the brokerís commission.

I have found the customer service to be excellent at virtually every major online stock buying and trading brokerage firm I visited. They are there to answer your questions and they are very patient. Itís an entirely different world than that vast number of symbols and numbers in the newspaper.

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