Online Stock Purchase For Beginners

2007-03-08 10:33:40

( Online Shopping )



If you are thinking of buying stock online, it is really advisable that you are at least familiar with online stock investing and the money market. You should not buy or sell stocks if you do not know the basics of stock trading. Doing so would probably make you lose a lot of your hard-earned money.

Before making an online stock purchase, you should familiarize yourself with some of the basic terms of stock trading. One term you should be familiar with is market order. Market order basically means that you will buy stocks with the current lowest price available.

Another term that would help you in your online stock purchases is limit order. Limit order means you set thresholds for yourself when it comes to purchasing stock. You set up the limit ahead of time to prevent you from spending more money than what is prudent on a particular stock offering. Trading stocks online are quick transactions and you are almost always guaranteed to make the purchase or the sale. So setting up limits ahead of time will prevent you from over spending.

Stop order is a similar term to limit order. Stop order means limiting the number of your online purchase for a particular stock. It means if your online stock purchase reaches a certain level, you will have to sell that particular stock. Stop order prevents you from owning a lot of the same stock to minimize your losses.

Asset allocation is another term a beginner has to be very familiar with before making an online stock purchase. It basically means that you should spread your investments equally between stocks, real estate, etc to protect you from large losses. If you invest only in stocks or in real estate, it means you can lose a significant amount of money if stock or real estate prices go down.


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