How to Buy Stock: Step by Step Beginner Guide
You think to start buying stock in the Stock Market don’t know how to Buy Stock Where to Buy Stock then you are in the right place, I guide you Step by Step Process.
It is a Beginner guide so I explain from Basic If you have any doubt it cleared.
A Stock is used to describe the Ownership of any Company. In a simple word, if you Buy XYZ company Stock/Share then you got Ownership of that XYZ company.
But you have not that much power to take important decisions in a company. It depends on how much you invest or Buy Stock. If you have more percentage of Stock than other then you own that company. it’s as simple as it.
Open an Account on Online Broker
In Past days Buying and Selling stocks have happened offline process means pen and paper.
The problem is you can’t track it and if you want to buy and sell the stock it takes a long process you may lose a big opportunity.
But nowadays things got to change, everything is changing everything happened online from account opening to stocks buying and selling.
Why Stock Broker? Stock Broker provides a platform where buyers and seller meet and decide on which price agree to make a transaction. and almost all stockbrokers provide leverage/exposer to buy stocks. so choosing a stockbroker is most important in the stock market.
Select Stock to Buy
Select a Stock is depends on how many days you want to carry it. In general investment in the stock market is 3 types. Longterm investment, Short term, and Intraday.
In longterm investors once buy a stock they carry stock for more than 1 year. For this, they research company background, management, annual reports, order details and many more.
In the short term, investor carries stock for more than one month to one year.
In an Intraday trader, they can’t carry stocks more than one day means today buy today to sell. It doesn’t matter you are in profit or not you must sell it.
In Intraday one benefit your stock broker provides good exposer so that you buy more shares but if the stock does not go as per your direction then it big dips in your pocket.
So think twice what type of investor/trader you have before bought a stock.
Different Order in Stock Buy
Before start buying stock need to know what are different orders available to buy a stock.
In Market Order, your buy or sell order is triggered at the best available price.
Ex- If you place buy order 100 stock on XYZ stock, stock available 50 stock on 100.10 and another 50 on 101. you buy a stock at 2 prices whatever price is available. same on sell-side also.
In a limit order, your buy or sell order is executed at a particular price that price you place at the time of order.
Ex-One stock current price 100 and you want to buy at 102. till stock not reached 102 your order is not executed.
Stop or Stop-loss order
A stop order also referred to as a stop–loss order, is an order to buy or sell a stock once the price of the stock reaches a specified price, known as the stop price. When the stop price is reached, a stop order becomes a market order. A buy stop order is entered at a stop price above the current market price.
Stop Limit Order
Stop–limit orders are a conditional trade that combines the features of a stop loss with those of a limit order to mitigate risk.
You may find some other different order provided by your broker. but these are basic.
Number of Quantity
As you are a beginner first trade with 1 quantity, once got some experience you increase the quantity.
Some of the newbies put all money in a single stock, don’t put all eggs in a single basket.
My recommended do some study, invest a small quantity in different stock. If the study failed in one stock other are performed well you managed your loss.
Disclosed quantity is how much quantity you want to disclose to others. let’s say you want to buy 100000 stock in XYZ stock but don’t want to show to others so you put 10000 in disclosed quantity. (its depend open how much % provided by broker).
Now you choose a broker, decide which stock you want to buy, how many days you want to carry, what type of order you want and also decide how many quantities you want. Once all thing is done then click on buy.
You successfully learn how to buy stock.
Frequently asked question
How much money need to buy a stock?
It depends on are you, investor or trader. If an investor buys 10 stocks on $100 then need $1000. If you are a trader as I mention the stockbroker provides a good amount of exposer you start with $10.
How can I buy stock on my own?
There is two way to buy stock through a broker easiest one and you can buy direct through the company.
What is the cheapest way to buy a stock?
You buy stock cheapest way through a discount stockbroker. Most discount brokers provide research on stock, daily report and some other feature like a full-service broker. so they apply less commission.
What happened after buying a stock?
If you sell a stock after buy you have two cases either profit or loss. let’s say you buy a stock at $10, sell at $20 you are in $10 profit. If stock fall to $5 and you sell at that time, your loss $5 as simple.
How many stocks should I own?
There is no thump rule that much stock you must have. between 10 to 20 otherwise, it difficult to manage your portfolio.
Best stock broker in India?
How to Buy Stock in the USA?
The process is the same for different stock exchange but stockbrokers are different depending on the country.
It is difficult to explain and learn How to buy stock in a single post. But I try my best to explain it. Before buying or selling a stock think twice or consult with your financial advisory.
I suggest don’t follow blindly someone strategy because that works for them maybe not for you. If you want to ask some questions about how to buy a stock then comment below. I try to answer it.