July 3, 2021, | AtoZ Markets – Are you wondering how to buy stocks online? You are in the right place!
A few years ago, people who wanted to buy or sell stocks or bonds had to phone the brokerage or even go to the brokerage house, which meant a waste of time and money for investors.
Today, technology allows us to access global exchanges in real-time, with just a few clicks.
In this guide, we will try to give you a practically easy-to-understand overview of everything you need to know to be able to invest in shares successfully. After reading this guide, you will be ready to start buying and selling stocks. In addition, we will answer the main questions you may have on the subject. Are you ready? Let’s begin!
Where to buy shares online: best platforms
Buying stocks today is much easier and cheaper than a few years ago, as you no longer need to go to the bank and spend a lot of money on commission and account maintenance costs.
Buying shares online without commissions, as well as buying and selling shares in the day, are completely possible thanks to online brokers.
Choosing the right broker is essential since if you rely on platforms that make you pay a lot for a single operation you run the risk of seeing your returns nullified at the outset.
Below you will find what we believe to be the 4 best platforms to buy stocks online.
eToro is perhaps the leading and most comprehensive online broker internationally. Born as a trading platform, it then expanded its offer becoming a point of reference also for investors with a long-term perspective.
The broker’s complete offering includes stocks, stock indices, ETFs, commodities, cryptocurrencies, currency pairs (forex), and copy portfolios.
eToro allows traders to access shares of the world’s major stock exchanges in real-time. In particular, we find more than 2000 shares on the platform, with access to 17 stock exchanges.
Thanks to this fantastic broker it is possible to buy shares without commissions, since the only way in which eToro remunerates its activity is through a small spread that you find already included in the price of the various assets available. This way you will never have any nasty surprises.
Furthermore, eToro allows you to open short positions on stocks and other assets (in order to gain when the price of the asset falls), and also to use leverage (in order to exponentially increase the effects of price changes on your returns).
LonghornFX is operated by Longhorn LLC, First Floor, First St Vincent Bank Building, James Street, Kingstown, St. Vincent, and the Grenadines.
LonghornFX is a true ECN broker where traders are granted fast and direct access to the world’s most liquid market with Straight-through Processing. Moreover, this company uses a cold storage system that is effective in ensuring the safety of clients’ funds in a secure offline vault.
Currently, LonghornFX offers a vast number of trading instruments, including 35 cryptocurrencies, 55 currency pairs, 64 stocks, 11 indices, and commodities.
Pepperstone is a forex broker from Melbourne, Australia. It was established in 2010. At first, they operated their business in Australia only. Later on, they expanded their business and opened a London office in 2015. The main aim of the company is to provide superior technology, genuine commitment & low-cost spreads to traders all around the world. Pepperstone is a broker that offers multiple currencies, shares, metals, CFDs, metals, cryptocurrencies, etc.
Find out more with AtoZ Markets Pepperstone review. If you have any previous experience with Pepperstone, please share it in the reviews section below.
TraderOr is a new online brokerage firm that gives you access to the financial markets where you can buy and sell various assets from different asset classes. Established in 2021, TradeOr provides the opportunity for you to trade stocks, FX currency pairs, cryptocurrency pairs, metals, ETFs, and energies.
In effect, this means that the average user, and beginner traders especially, will definitely be able to find an adequate selection of assets to choose from and try out their newfound trading skills.
Unlike traditional commodities and stockbrokers operating in the market, TraderOr has a different pricing structure. Overall, TraderOr is considered a low-cost brokerage firm though it does not yet provide a detailed list of all charges and commissions on its website.
Investing in stocks: how traders make money
As a rule, stocks are bought in the hope that their value will rise as quickly as possible. When securities rise significantly in price in the stock market, then they can be sold and profit from the difference. There are many trading strategies, but not all are suitable for a beginner.
Often, stocks are bought at the time of growth. The logic is simple. If securities began to actively rise in price, then there is a high probability that they will continue to grow in price. This strategy has a flaw because there is no guarantee that after the start of growth in value, securities will not immediately fall in price. Therefore, one cannot do without fundamental and technical analysis.
Other traders trade the exact opposite strategy. They buy securities when they are very cheap. That is, investors buy stocks, catching the moment when they are as cheap as possible, and then wait for growth.
Learn how to buy stocks and improve your investment skills
Below, we have listed how to buy stock online in 5 steps:
Step 1: Open a stock account
To be able to buy stocks, you must have an account with an online stockbroker. You can open these accounts with your bank. However, it is almost always better to instead open an account with an online stockbroker. It is much cheaper to trade shares with online brokers than it is with your bank.
Step 2: Deposit money into your account
This step assumes that you have made the smart choice and registered an account with an online stockbroker. If you have not done this but instead prefer to trade shares through your bank, you can skip this step. If you trade in shares with your bank, your share account is normally tied to your regular bank account. Money will be deducted from this account when you buy shares and deposited in this account when you sell shares.
If you have chosen to register with an online broker, you must transfer your money before you can start shopping. The best way to do this is through a bank transfer. The online broker will give you a bank account and all the information you need to be able to deposit money into your account with the online broker. Keep in mind that it can take 2-3 days before the money is in your account and you can start trading.
Step 3: First decide which stock you want to buy
After opening an account with a broker, you can get started. You must first determine what stocks you want to buy. You can search for a company that you want to be a co-owner. It’s smart to start with a few companies that you know well. So it is important to dig a little deeper. Don’t buy stocks just because you think it’s a great company. Look at the annual figures to see how the company has performed in the last period. Also, research the vision of the company and consider whether the company is likely to continue to grow in the future.
Step 4: Determine how many shares you want to buy
The next step is to determine how many shares you want to buy. Especially in the beginning, it is advisable to invest only a small amount. Take the time to learn how the stock markets work. It’s only smart to start with larger amounts once you understand this market. You can even try buying and selling stocks risk-free with a demo account.
Step 5: Select the order type
When you go to buy stocks, you also have to choose the type of order. When you buy stocks, you will first see the selling price and the buying price. The sell price is the price at which sellers want to sell a share. The buy price is the price at which buyers want to buy a share. There is always a difference between this price. We also call it a spread.
When buying stocks, you can use different types of orders:
The market order is an order in which the shares are bought directly at the market price. The price may be more expensive with this type of order. Stock prices are constantly fluctuating. A market order is suitable for the investor who wants to hold stocks for a long time. A difference of a few pennies is less important when this is your strategy. You have to be careful with market orders. When you place a market order outside of the trading session, your investment can be much more expensive. The price of a stock can rise considerably outside of the trading session.
A limit order is only executed when a certain price is reached. This is useful if you are an active trader. It can also be helpful to use a limit order in less volatile markets. In markets with little activity, the price can suddenly make strange jumps. With a limit order, you are not sure that your (full) order will be executed. Are you sure you want to buy a certain stock? So it may be smarter to use a market order. There is also a specific type of limit orders. An all-in-one order is only executed when all shares are available at their limit price. A good day order is deleted if it is not executed before the end of the trading day.
Watch the video below that also shows how to buy stocks effortlessly.
Advantages of buying stocks online
Until a few years ago, to invest in shares of a company, it was essential to go to your bank and tell your advisor which shares you wanted to buy. You had no control over the final price you were going to pay for a certain stock, much less did you know the exact commissions that your bank was going to charge you with it.
Thanks to the internet, for a long time we have had access to real-time quotes and a large amount of information that helps us make decisions in a much more precise way.
Investing online has these advantages:
- Real-time quotes
- Choosing the exact price you want to buy at
- Low commissions and knowing them in advance
- Speed in the execution of orders
- Quick account opening
- You can buy with a credit card, transfer, or even Paypal
- You can go “short” and sell stocks without owning them
As you can see, there are many advantages of trading stocks online instead of doing it directly in the bank.
Now you decide which companies you want to invest in. Here we show you some of the most demanded and that arouses the most interest among investors.
What shares to buy?
Have you already decided to invest in the stock market? The next step is to choose the stocks that suit your strategy and start trading the market!
- Apple (NASDAQ: AAPL)
- Tesla (NASDAQ: TSLA)
- Amazon (NASDAQ: AMZN)
- Microsoft (NASDAQ: MSFT)
- Visa (NYSE: V)
- NVIDIA (NASDAQ: NVDA)
- Netflix (NASDAQ: NFLX)
- Pinterest (NYSE: PINS)
- Paypal (NASDAQ: PYPL)
- Alphabet (NASDAQ: GOOGL)
You can buy all of these top stocks, as well as many others, on the platforms mentioned above.
Buying stocks online: frequently asked questions
What are the best sites to buy stocks online?
As seen in the article, the best sites and platforms to buy shares online are eToro, LonghornFX, and TradeOr. Plus500 also offers a free demo account, with which you can create a virtual portfolio and practice buying and selling stocks online without risking real money.
Which shares should you buy?
The choice of stocks to buy actually depends on the style of trading you want to put in place. If you intend to buy stocks for a return strategy, those of companies that offer an attractive dividend policy should be preferred. If you intend to quickly resell your securities to obtain a surplus-value, you must favor the purchase of shares that show high volatility and that have clear, and obviously bullish, trends on the market.
Is buying stocks online safe?
This is a question that many savers and investors ask themselves: is buying stocks online safe? It certainly is if you rely on serious platforms such as Pepperstone, eToro, or the other brokers described in the article. Before relying on a broker, it is however necessary to verify that this has a regular license and that it implements the appropriate security measures to protect its customers.
What is the best time to buy stocks?
Buying shares on the stock exchange does not have to be done at any time. Conversely, if you want to resell them at a higher price, it is recommended that you buy the shares when their price is low or when they are about to follow a long uptrend. It is also possible to buy shares in a company that increases the transfer rate to shareholders each year to profit from attractive dividends over the term.
Is it worth buying and selling shares in the day?
Buying and selling shares in the day means trading intraday, and is recommended only for experienced investors and traders who know exactly what they are doing. You can make a lot of money, but the losses can also be high.
Think we missed something? Let us know in the comment section below.