How to Make a Stock Trade Online

This article will explain for new investors how to make a stock trade online, start to finish.

The process of placing a stock trade can be broken down into eight steps which we have listed below. For new investors learning how to trade that do not have a discount broker we have an example of a trade ticket after the steps.

1. Choose whether to buy or sell.
The first step is always to choose what we would like to do, buy or sell shares of stock. Until shares are purchased they cannot be sold.

2. Insert Quantity.
Next we enter how many shares we would like to buy or sell in total. To calculate how many shares we can afford, simply take the total amount of cash currently in the account and divide it buy the stock's last price. So, if stock XYZ is trading at $10 and we have $1000 in our account we can then afford to purchase 100 shares of stock.

3. Insert Symbol.
The ticker symbol is what is input into this box to denote the company we are going to buy or sell shares of. For example Disney has a ticker symbol of DIS, Apple is AAPL, Microsoft MSFT, etc. If we are not sure of the company's symbol there is a link to simply search and find it out.

4. Choose Order Type.
Order types include Market Orders, Limit Orders, and Stop Loss Orders. Market orders buy or sell the desired shares immediately at the current market prices. Limit orders tell the broker to only buy or sell these shares if I can get $xx price or better. Lastly, stop loss orders are combined with a market or limit to tell the broker once $xx price hits, then trigger this follow up order. For new investors getting started we suggest simply sticking with market orders.

5. Choose Price.
This box is only filled in if we are using a limit order or stop loss order. Read the above or follow the links to learn more information about these types of orders.

6. Expiration, Special Instructions, Routing.
New investors should ignore these fields and leave them simply as their default values. These options give investors more control as to how long certain orders should remain active and how they should be filled.

7. Conditional Orders.
Conditional orders let investors pre-program their entry and exit strategies for the stock they desire. These orders can be effectively used for investors that cannot be at their computers during the day to place their trade. New investors should also ignore this option and leave it blank.

8. Reviewing and Placing the Order.
After the basic inputs have been made the "Place Order" button will appear and allow us to complete the order. By default a summary screen always appears once this button is clicked to summarize the order and confirm we have enough funds in our account. Once investors have experience and are comfortable with the trade ticket this confirmation page can be disabled.

For a visual example of the above steps please refer to the image below which is a screenshot taken from the TD Ameritrade website. For more great articles visit our investment education page.

amtd-trade-form

Comments

  1. Posted by Vince on April 25, 2007 at 1:19 pm

    Ameritrade are the best....

  2. Posted by Steve on August 9, 2007 at 11:31 pm

    Interesting basic article to get started but there is so much that you should be aware of before you start trading. Your broker won't reimburse you for "oh I didn't know that". I have a website called http://www.asia-etrading.com. Its not a tip sheet or a pick of the day site at all but it is an electronic trading reference for info such as settlements, exchange holidays, shareholder rights, etc. This is a US site and mine is Asia only but you will get the idea of other relevant info you should have going forward. The Tokyo Stock Exchange was set up by the US to mirror the NYSE. Good luck with your first trade because you will be all alone when you make it.

  3. Posted by Cody Staub on October 2, 2007 at 3:09 pm

    Not a bad intro. The only real experience I have with stocks is with the Virtual Stock Exchange game I've been playing for about a year. You'll see me around here a lot more because I really want to start playing around with the stocks ;)

  4. Posted by Market News on May 6, 2008 at 3:56 pm

    A great article but if one is not able to enter a trade online it is better to use a paper trading account and just buy mutual funds...

  5. Posted by umesh on May 22, 2008 at 12:03 am

    :grin: pl help about the on line trading steps how to go about that

  6. Posted by Blain Reinkensmeyer on May 22, 2008 at 10:50 pm

    I am unsure what exactly you are requesting, but there are a whole list of articles I've written on stock education you can find right here on the site. Click the tab on the top that says "stock education" and it will appear.

  7. Posted by Mandy on May 28, 2008 at 2:12 am

    Is Ameritrade recommended for newbie in stock trade online? What are the other alternatives?

  8. Posted by Blain Reinkensmeyer on May 31, 2008 at 1:09 pm

    Hi Mandy,

    I would go with either TD Ameritrade or Scottrade if you are a new investor! They have low commissions, no catches as far as fees, and a lot of free tools to offer for those just starting out.

    I hope that helps - good luck!

  9. Posted by Kerrblur on August 7, 2008 at 1:52 pm

    Are Flat-Line Stocks a Low-Risk way to start trading?

    I haven't traded stocks before and I am trying to understand little at a time hah. Any help would be great.

  10. Posted by Blain Reinkensmeyer on August 12, 2008 at 2:37 pm

    Not sure what you mean by flat line stocks but a great low risk way to trade would be to invest in ETFs which are like mutual funds but have lower fees and trade like stocks,

    http://www.stocktradingtogo.com/2007/06/19/grow-your-portfolio-with-etfs/

  11. Posted by Jean Philippe on August 23, 2008 at 2:31 pm

    Hello,
    1-how can I open a Trading Account please?
    2-how can I fund my account please?
    Thanks,
    Jean Philippe

  12. Posted by Blain Reinkensmeyer on August 26, 2008 at 4:29 pm

    I would read over the top 5 online stock brokers page and find a broker that could suit you there,

    http://www.stocktradingtogo.com/2007/05/31/5-top-online-stock-brokers/

    As far as funding your account that is easy and the broker will walk you through the process on their site.

    Hope that helps!!

  13. Posted by Mary on October 3, 2008 at 1:44 pm

    ques. 1 When your bank gives you a direct number to the trading desk, is it some desk out there in trading land? Or are these particular traders hired by the bank to trade for their customers? everyday people like me don't know all the basics :)

    ques. 2 I placed a trade by 1st giving my acct # and asking for a quote, gave stock symbol...then I said I would like to sell x number of shares symbol xyz... at market.
    So then the guy is himming and hawwing around...says something is wrong. then says...nothing is happening...this is unusual....hmmmm....sorry about this.....hmmmm...this is very unusual....hmmmm I'll have to make a call.....by the time he finished mucking with my trade I lost 500.00
    My question is...is this normal ? the trade I made before that was also mucked with. All my trades before this...spring...summer...went fine. I am not Pleased with that treatment.
    thanks for listening.
    Mary

  14. Posted by Blain Reinkensmeyer on October 8, 2008 at 9:50 pm

    1. Hired by the broker, you will be speaking with a broker rep if you place a trade over the phone.

    2. That is terrible! What broker are you using? I would suggest placing your trades online to avoid this hassle with speaking with a broker rep. Furthermore, the fees will be much cheaper!

    Talk a look through our list of top stock brokers and see if you see anything of interest,

    http://www.stocktradingtogo.com/2007/05/31/5-top-online-stock-brokers/

  15. Posted by sriramvijay on March 17, 2009 at 3:46 am

    nice...

  16. Posted by George Kagawa on June 2, 2009 at 5:15 pm

    (What's a Gravatar?) I'm a 74-year-old newbie and have a small nestegg to invest. I want to invest in about 25 stocks and have been advised to use a trailing stop loss of 25%. Will most online brokers do this, or just a set dollar amount stop loss? Thanks, George Kagawa

  17. Posted by Blain Reinkensmeyer on June 4, 2009 at 12:31 am

    Hi George, I just emailed you back but please go to this page and from there you can find a broker to trade with,

    http://www.stocktradingtogo.com/discount-stock-brokers/

    Hope that helps and good luck!

  18. Posted by AL on August 25, 2009 at 4:14 pm

    I AM INTERESTED IN CLOSING MY BROKERAGE ACCOUNT AND TRANSFERRING IT TO FIDELITY. HOW DO I ACCOMPLISH THAT?

  19. Posted by Blain Reinkensmeyer on August 25, 2009 at 4:48 pm

    Before choosing Fidelity I would compare all the stock brokers here, http://www.stocktradingtogo.com/stockbrokers.html. To transfer though it is very easy, simply open a new broker account and inform the reps you are transferring assets from your old broker to them.

    Some brokers like TradeKing will reimburse you of up to $150 in transfer fees. Read the details here, http://www.stocktradingtogo.com/2009/01/27/tradeking-offer-free-account-transfer/.

  20. Posted by Fermin Kindell on February 9, 2010 at 3:12 am

    I will say this is the third time I have visited your blog and Im loving it! I added your site to my rss reader. Looking forward to see more updates!

  21. Posted by Michael on May 18, 2011 at 5:02 pm

    Can I buy and sell the same stock unlimited times?

    Like if a stock goes up $1 then sell and then later same stock goes down $1 I buy it back and so on

  22. Posted by Blain on May 18, 2011 at 5:49 pm

    Yes, you can buy and sell as many times as you'd like. Note though, if you make four round trips (buy and sell) within a rolling five day period you will be flagged as a pattern day trader and need atleast $25,000 to continue doing so.

  23. Posted by atta david on August 18, 2011 at 9:10 am

    how can i get a good broker,and how much to open an account

  24. Posted by Blain on August 18, 2011 at 9:20 am

    Great question, this post should help a lot: http://www.stocktradingtogo.com/2010/11/11/best-online-broker/. If you have any specific questions about brokers feel free to email me directly via the contact page. Good luck!

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