12 Ways to Buy Stocks Online Trading for Beginner Investments

trade online stocks

Stocks are one of the most popular financial market instruments. Issuing shares is one of the company's options when deciding to fund the company. On the other hand, stocks are an investment instrument that many investors choose because stocks can provide an attractive rate of return.

Shares can be defined as a sign of an individual's or party's (business entity's) equity participation in a company or limited liability company. by including the said capital, the party has a claim on the company's revenue, a claim on the company's assets, and the form of attendance at the General Meeting of Shareholders.

Buying stocks online is the easiest way to invest in stocks for beginners. By buying and selling stocks online, you can save time, make cheaper and faster stock transactions. I compiled 12 ways to buy stocks online for beginners with the latest updates.

Before being tempted to play stocks, my advice is to understand carefully what stocks are and all of their aspects.

Many steps need to be considered to be able to buy stocks online.

I note there are 12 important steps.

1. Select a Stock Broker

The earliest is that you have to determine and choose a stock broker.

Our focus is buying and selling stocks online, choose a broker that has a good and reliable online stock application.

Some brokers provide dummy-trades that you can try to use to evaluate whether the broker's stock trading application is good or not.

2. Open a Share Account

After choosing a broker, the next step is to open a stock account.

Opening an account is mandatory because otherwise you will not be able to make stock transactions.

A good broker provides an online account opening facility where you simply fill out an online account opening form and send the document once signed.

3. Open a Customer Fund Account

Apart from opening a stock account at a broker, at the same time, what is no less important is the opening of a Customer Fund Account.

If a stock account allows you to buy and sell shares, Customer Fund Account is a special account created at a bank to store funds for buying and selling shares.

Even though the share account has been opened, but if Customer Fund Account has not been created, you cannot start stock transactions.

4. Modal Sector

After the share account have been successfully opened, you need to deposit funds to make stock transactions.

The deposit amount depends on the number of share transactions to be made.

My experience is for the first transaction, you have to make a deposit first, then you can make stock trading transactions.

After the first transaction is successful, the next transaction you can make a settlement or payment of obligations within 2 days of the transaction.

5. Online Shares Buying Transactions

After the funds are deposited and effective, you can carry out share buying transactions.

How to buy shares in the online application is as follows:

  • Decide on the stocks you want to buy and select those stocks. It's a good idea to remember the ticker code because it will be easier.
  • When placing an order, you will be asked to determine at what price you will buy the shares of your choice and the application will show the bid price and the offer price.
  • If you want the purchase to be effective right away, you put the purchase price equal to the lowest offer price, then you will get the shares.
  • If you want a cheaper purchase price, then you put it at a price below the lowest selling price, which means you have to wait in line until a seller wants to reduce the selling price to the purchase price you installed.
  • Place your purchase order according to price and time priority.

After the transaction is successful, you can check the Portfolio page which shows your current share ownership (average price, number of shares and stock investment value).

6. Online Shares Selling Transaction

trade online stocks

The shares that you own can be sold through the online stock broker application.

How to sell stocks is:

  • Select the shares that you own and then determine the selling price and the number of shares to be sold
  • The selling price determines how fast the transaction can be made. If you want to sell your stock immediately, you place it at the highest buy price on the market at that time. However, if you want a bigger sales result, you can put it at a higher selling price, but the consequences

7. Changing Stock Orders Online

When trading stocks, you can change or 'amend' the buying or selling price.

In the online stock application, there is a facility to make these changes.

If the position you have placed is not executed, while you want to immediately buy or sell the stock, then you can see the position of the buy and sell prices available on the market at that time and make a price change - amend - according to the current market conditions.

8. Transaction Settlement

In buying and selling, you have to pay when the transaction is made. There is money there is goods.

Things are different on the stock market.

On the exchange, settlement of transactions - settlement - is made within T + 2 or two trading days from the time the transaction is made.

How much is the transaction fee?

9. Share Transaction Fee

In stock trading, you must pay a fee for the stock trading transaction to the broker who executes the transaction order.

  • Brokerage Fee 0.15% of transaction value
  • Tax on 10% transaction fee
  • Stock Exchange Fees

At first glance, the share transaction fee looks small for one transaction.

However, the thing that must be considered is that if you make repeated stock transactions, in a buy and sell position, the transaction fee will incur a lot of fees, which in turn eat up your profit.

10. Fundamental Analysis

How to determine the fair price of stock or fair-value?

But, before that, why should you know fair-value prices?

Because based on this fair-value price you can decide whether the price of a stock is still cheap (so it needs to be bought) or already expensive (so you need to wait until the price drops).

One method of determining the value or price of shares is known as Fundamental Analysis or Fundamental Analysis .

Fundamental analysis uses financial statements as the basis for determining and calculating the fair share price at what price.

Fundamental analysis requires a good understanding of financial statements and knowledge of the stock business.

I suggest using fundamental analysis to select stocks because I think buying stocks is buying a business where an evaluation is made of the company's performance and finances.

There are already many brokers who provide financial report data and financial ratio calculations online, so you just need to do the analysis and don't need to collect data anymore.

You can see in the picture above, an example of data facilities and financial ratios provided by an online broker:

11. Stock Screener

How to choose stocks easily?

It's not easy considering there are many stocks on the exchange.

However, you can get started by using the stock screener feature, available for free at the broker, which filters stocks based on your chosen criteria.

I find stock screener very helpful because I don't have to check stocks one by one.

There are several ways to define criteria in a stock screener:

First , you determine your criteria based on experience or discussions with other parties, with this manual method you can make a list of preferred stocks that you want.

Second , you can use preset criteria, which are commonly used and familiar criteria, based on the style of investment gurus such as Warren Buffet, William O'Neil and others that can be used immediately.

Which strategy should you choose, I suggest, according to your knowledge and beliefs about stock selection criteria.

12. Diversification

Diversification is the key to investing in stocks.

The way to manage risk in stock investing is not to invest in one or two stocks, but to divide or diversify into many stocks.

The goal is that when the stock price drops, you still have the stamina to survive because not all of your stock investment has dropped.

One well-known diversification strategy is to buy an index fund, which is to buy all stocks according to the weight of the index, so that profits follow the index's gains.

Conclusion

Stocks are the best investment - the highest return and high liquidity!

Unfortunately, the number of stock investors in Indonesia is still very small.

As financial technology advances, fintech, now buying stocks online is an easy way to invest in stock instruments.

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