The Beginner’s Guide to Online Stock Market Trading
What is online stock market trading?
Stock market trading is a method of buying and selling shares via the Internet. It’s also known as “online share dealing” or “stock trading.”
How to begin stock trading
First, you have to create a share dealing or stock trading account online; then, you are able to deposit money into the account and begin purchasing and selling your shares.
How you can begin stock trading
Here’s how to find an account for online stock trading. When looking for the best platform, consider the following:
- How frequently you are planning on buying or selling: If you want to make a number of small investments, be aware that you will get charged for every investment.
- How much you’re looking to invest: If you are planning on buying shares as a long-term investment, check for platform fees, whether they are monthly or annual.
Each of the platforms has various fees and expenses, so it’s best to compare as many as to help you find the cheapest, most competitive option before you open your account.
What are the different charges involved in stock market trading?
There are two primary types of charges:
- A charge per trade: It’s a fee that’s payable each time that you buy or sell one or more shares.
- A platform fee: It’s the amount payable each month or annually in order to use the platform of a share dealing company.
If you are planning on making a number of trades each month, most companies will offer you a rate for frequent traders, which is a reduced charge amount per trade.
For instance, while a company can charge {currency}12 each trade, however, if you are making more than ten deals per a month, then the fee per trade could lower to {currency}6 during the next month.
Before investing
Here are some points to keep in mind before you begin stock market trading:
- You should only invest money you can afford to lose. There’s no guarantee you’ll get the money back.
- Start with just small investments. Starting like this will let you get acclimated to the platform’s process to buy and sell shares. This is beneficial if you’re new to the world of online stock trading.
- Research each of the companies you from which you are looking to buy and sell online shares. Visit their site and search for economic news stories regarding their brand.
How To Choose The Best Online Stock Broker
With all the different options available in the UK for online CFD Stock Brokers, making the decision on who to trade with seems like quite a complicated and daunting task. This guide has a few main points to have in mind to help you reach an educated decision on picking the best broker for you to help you buy stocks:
Regulation
Each country has their particular regulatory body. It is in charge to make sure that the rules and regulations are followed to help protect and maintain the integrity of the market, traders, investors, and the brokers themselves, such as the Financial Conduct Authority (FCA) in the UK. These regulatory bodies help members meet regulatory responsibilities. To avoid any potential safety concerns with regards to the deposit, you should always make sure that your accounts are with regulated trading firms.
Customer Support
Before choosing a broker for stock market trading, you’ll want to see how complete their customer support department is. For your security and peace of mind, you will want to be able to reach and get the help you need without waiting too long to be answered. Some companies offer 24/7 customer support with a live chat option or even a local phone number.
Withdrawals
You will want to look at how long it can take to withdraw your funds once you have completed your trading and buying stocks. Some online stock brokers have fees for withdrawing remaining balances. Some also have long waiting periods for the balance to be withdrawn.
Account Types
Depending on what type you are interested in opening, you will need to know the different account options offered by each online stock broker. While some offer a broad range of accounts, others have a single account type available. You may want to look for a broker who has different account types for beginners, intermediate and advanced traders.
Tradeable Assets
While selecting a stockbroker, it’s possible to just concentrate on buying stocks. However, you should keep in mind there are countless types of investment alternatives offered. Such as Cryptocurrency, Forex (FX), CFDs, or trading in futures, options or precious metals, to just name a few.
Interest
An online stockbroker should provide you all the necessary information about the interest charged when you take leverage. Although there isn’t a huge difference in the interest rates between online stock brokers, it is something to be aware of when choosing a specific broker.
Platform Types
Most traders who are just starting out don’t know how they will be trading. However, most advanced traders know that they’ll be trading while on-the-go, so they look for an online broker with an excellent mobile platform. It is best to know what your platform requirements are before signing up and investing funds.
For more information on selecting the right trading platform for you, please see our tutorial: What To Look For When Choosing A Trading Platform
