A Beginners Guide: Process of buying stocks online

Introduction:
Investing in the stock market is a process to secure your future and reap benefits from your present-day savings. Warren Buffet, a renowned personality in the field of investing, states, “Investing is the process of laying out money in the expectation of getting more in return in the future.”
Suppose you are into a nine-to-five job, and your monthly residual income after excluding the expenses is $1000. You want to begin investing but do not know the process of becoming a professional in the field. In this article, we will discuss the step-by-step guide to beginning the process of Investing in stocks.
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A step-by-step process to begin investing in the stock market:
Choose an online stock broker:
This is one of the easiest ways to start investing in stocks safely with proper guidance. Choose an online stock broker, whoever is prominent in the industry, and open an account with them. As a matter of fact, you are first time starting to trade in stocks, so before opening the account, you will need to go through the proof of identification. After opening the Demat account, you can easily start trading stocks from the broker’s website.
However, the other options include directly trading the stocks from the company’s website or using a full-service broker. After completing the process, you can easily transfer the funds from your bank account using a debit or credit card or by mailing a check.
Do in-depth research on the stocks you want to buy:
The real battle starts in the second step of the process. When you have completed all the formalities and funded your Demat account, it’s time to select the stocks you want to purchase. Moreover, if you look from a consumer perspective, you will surely have a hunch on the companies that can generate profit in future looking at the present scenario.
Do not fall into the trap of data provided by your stock brokerage firm, online data, or even what stock market experts are quoting regarding a stock. While investing, the most important part is to listen to your own instincts. Warren Buffet quoted, “Buy into a company because you want to own it, not because you want the stock to go up.”
Once you have discovered the companies or even the industry which can incur profit in future, it’s time to read the company’s annual reports. These reports are publicly available, so you won’t have a hard time looking for them. Especially look for the letter that the company sends to its shareholders. This letter is of utmost importance because of the fact that it will give you a general idea of what is happening inside the company and between the shareholders.
Moreover, all the other analytical tools will be available on the brokerage firm’s website, including conference call transcripts, SEC filings, quarterly earning updates, and so on. Furthermore, now the brokers even provide tutorials on how to use the analytical tools.
Decide on the number of shares you want to buy:
As a novice trader, you should be very careful while buying shares. The best thing you can do is to start paper trading. Paper trading is a concept wherein you can play with artificial money, but the stock prices will be real. This will give you an idea of how to buy and sell the stocks. The other way is to start trading with a really small amount of money.
As mentioned above, suppose $1000 is what you save. Instead of being in a hurry to invest all your money, you can invest $100, or even $10, just to get a feel of owning a stock.
Moreover, being a beginner in the stock market, you can start by buying Fractional shares. Fractional shares are a relatively new concept used by various prominent brokerage firms, in which you own a fraction of the share instead of owning the entire share. Robinhood, SoFi Active Investing, and Charles Schwab are among the prominent brokers who are offering the service of fractional shares.
Additionally, there are technical tools that can convert your dollar amount to the number of shares you can purchase from that amount. For instance, $1000 is what you have right now. So by using those tools, you can know how many shares you can buy by using $1000.
Decide the order type:
There are a lot of technical terms and order types used by professional and experienced brokers. First, naming some of the most important order types, including Ask, Bid, Spread, Market order, Limit order, Stop-loss order, and Stop-limit order.
However, it is not necessary for you to become a successful trader to beware of all the order types. Most investors have made their careers in investing by just two order types, market order and limit orders. A market order is to sell or buy the stock when the best price is available. A limit order depends on the stop price; when the stock touches the stop price, the trade turns into a stop-limit order.