Learn How to Buy Stock

While buying stock is a fairly simple process after you have done it a couple of times, it can be a little bit intimidating for the first time stock trader. Learning how to buy stock is the first step to entering the stock market. For those of you who have never made a single trade I am going to explain the basics of purchasing a small batch of stocks.

The first step is to open a practice stock trading account. You don’t want to use real money when you are learning how to buy shares. It is a good idea to get the mechanics down before using your money. There are many brokers that offer free practice accounts. Think-or-Swim is one that I can think of off the top of my head. Once you have opened your paper money account you can make your first practice trade.

Go to the order screen on the Think-or-Swim software. You will see different fields that require your input. You will need to pick a stock that you want to trade, and determine how many fake shares you want to purchase. Let’s start with IBM as an example. You would put the symbol IBM in the field for the stock you wish to buy. Then you enter some quantity. Let’s use 100 shares for now. Remember that these are just examples and not advice on what stocks to buy. Now you must choose what type of order you want to place. You will see options including: Market, Limit, Stop, Stop Limit. All of these different order types execute in different ways.

For now we are going to use a market order. This means that the order will execute as soon as you send it. You will pay the current asking price for the shares of stock you are trying to purchase. Once you have filled in all of the fields you can hit the send or execute button. You will most likely have to confirm your order on the next screen. That’s it! You have just gone through the steps necessary to buy stocks. Continue to experiment with the different order types to give yourself a better idea of your options when making a purchase.