Finding A Broker
Your broker will be the middleman between you and the exchange you wish to buy shares from. They will be taking your order and filling it in your name.
To choose a broker, you will need to determine what your goal in the stock market is. Are you going to keep the shares on the short term, mid term or invest in a company on the long term?
Short term: if you plan on holding your shares for a few hours or days, what you should be looking for is a broker that offers low transaction costs, and that will execute your orders very quickly at the right price. Depending if you will be analyzing stocks on the broker’s platform, you will also benefit from a relevant news feed and well designed/customizable charts.
Long term: if you plan on holding your shares for months or years, you should be looking for a solid broker with a long track record, which you know can be trusted with your investment even though you will not be looking at your account balance for months at a time. Transaction costs should not be a priority, since you will be placing very few orders. You should also find a broker which allows you to open a TFSA (Tax Free Savings Account). A TFSA is an account on which capital gains are exempt from taxes. Such accounts usually don’t allow you to day trade, which is why they’re mostly appropriate for long term holdings.
Mid term or “swing trading”: if you plan on holding your shares for a few weeks, you should be looking more at short term benefits, such as low transaction costs and good execution.
Reviews for your broker should be obtained from unbiased sources, as many websites are paid to promote certain brokers, and boost their ratings. Finding past experiences from actual users could be your best bet.
Placing The Order
Once you’ve found your ideal broker and also which company you’re going to be putting your money into, it is time to place an order.
The New York stock exchange opens at 9:30 AM and closes at 4:00 PM from Monday to Friday, which is the window you will have to place your order. It is possible to place an order on weekends or after 4:00 PM, but it will be filled when the market next opens. I would not recommend to place a market order in case an unexpected gap occurs when the exchange opens. You will have to verify the opening hours for the exchange that is relevant to you.
Depending on which broker you choose, the order options will differ. These are the most conventional order details you will need to fill:
Account: it is possible to open different accounts when registering with a broker. You will need to choose the account in which the funds will be taken for the purchase of your shares.
Action: you will need to choose either to sell or to buy stocks. If you are acquiring your first shares, you will probably need to select “buy”.
Quantity: you will need to choose how many shares you are going to buy or sell.
Symbol: you will need to choose which stock you are going to buy. The symbol refers to the ticker. For example, Apple’s ticker is AAPL. When inputting the ticker, you will probably be recommended companies that fit the symbol you entered; you should be able to find the company you are looking for there. A quick Google search with the company’s name should provide you with their symbol.
Price: you will need to choose between “market” or “limit”. Choosing “market” means that you will be filled at the current best price available. It should probably be avoided on low volume stocks, since the price you will be filled at may not represent the price you are willing to pay. For example, you could place an order for a stock priced at 125$, but be filled at 135$ a few minutes later.
Choosing “limit” will give you the option of inputting the maximum amount you are willing to pay for a stock. For example, placing an order for a stock priced at 125$ with a limit of 130$ will mean that you are not going to pay more than 130$.
Expiry: you will need to choose when the order expires. Default expiry usually is set at the end of the trading day.
Before submitting your order, I suggest that you double and triple check to make sure that everything is accurate.
