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Trading 101: How to Buy Stocks

May 31, 2021
So you just heard about this stock market thing and you want to buy some

stocks

, but hey, how can you do that? I see all these different types of orders, what do they mean? Let's talk about it before you can do what I'm trying to do. To talk in this video, you have to take an initial step and that initial step is to register with a brokerage and with the brokerage that you want to do an online brokerage, don't go to your community bank or something like that and then continue. your brokerage because their fees are going to be crazy so online brokerage I will put a link in the description below that I put together a guide on how to select the right brokerage for your situation.
trading 101 how to buy stocks
We will also show a link above the screen here so it will be down in the description box below so that is the first step you need to first align yourself with an online brokerage after you register maybe you are already registered you will have a lot of different options for orders in terms of how to buy and how to sell, that's what I want to break down in this video, so we'll take it one by one and hopefully you know that when you're done with it you'll understand everything. What all those little drop down options mean you know when you click on that little arrow and you see a bunch of options, maybe there are just boxes that you select or whatever, but anyway, I hope you saw all of these because they are very For the sake of argument, we're going to talk about a stock that's currently

trading

at $25, so the current price of the stock is $25.
trading 101 how to buy stocks

More Interesting Facts About,

trading 101 how to buy stocks...

We'll just call it ABC. Now the first type of order that you can see is what we call a market order. So what does the market mean? Order means if you select that option it means I only want it and I don't just want ABC. I wanted it at any price. I don't even care. I just want to have shares. I want to own

stocks

. I want to buy them. not in a few minutes right now so the market just says I want it now and you're going to pray for whatever price the market gives you so if this fluctuates up let's just say 2502 so if that price goes up 2502 for whatever reason. reason no, maybe like a split second before you click the Buy button and it goes up 2500 - it doesn't matter, you're entering at 25 Oh - if it goes and let's say it goes down to 24, you know, 97, right? before you buy it doesn't matter if you are entering you want it now so it will give you the current market price so that's what a market order is the next type of order is a limit and all strategies are different . but a limit is more times and not the order you want to use because market orders, especially you know penny stocks or illiquid markets, I can cause you quite a bit of trouble, but a limit but also at the same time, limit orders market they do.
trading 101 how to buy stocks
They have their place in the market, so I don't want to say like that, you know, like a black hole or something. I mean, they have their set time, but a limit order essentially says: I want it, but what is it? but it's saying, "You know I really want that, but I'm only willing to pay a certain price for it, so again, if the stock is

trading

at 25, you're like you know I want in, ABC, but no." . I don't want any at 25 you know I'm only willing to pay $24.90 you would select a limit order and then when you select a limit your brokers will ask you well what is the but what price are you willing to pay ?
trading 101 how to buy stocks
In our example you would place a limit order for twenty four ninety which means you won't get any action from this unless the price hits 24.90, so if the price goes down and hits 2491 you won't get any action . If the price goes up to twenty five fifty you didn't get any action, you were only willing to pay twenty four ninety on the order, that's what a limit order is, the next type of order is very very important, stoploss type, now what happens here is the stop-loss only belongs to you if you have entered, so this or this type of order has already taken place so a stop-loss order is relevant to you and a stop-loss says I want to exit now the name the small deception because it implies that maybe you know how to stop a loss, but in other situations you do, especially when you become more advanced in trading, a stop-los can still get you out of a position, but it doesn't actually stop a loss because it would already be making money, so it's not like this refers only to losing trades.
This is just the way of saying again: I want to exit the trade, it could be a losing trade, it could already be a profitable trade, but you just want to exit now within this. family, there are two types and hopefully they both sound familiar to you, there is a market stop and there is a limit stop, the market says I want to get out now, so it will take you out of the trade whenever you want, so let's say you enter. right here at 25 and you say you know what I just want to risk 10 cents so you can put in a market at 2490 and if the price goes down there and gets to 2490 bam your broker will sell your shares and you We're going to exit but the market it means that no matter what, so if the price really starts to go down quickly, maybe by the time all the little computer algorithms do their thing, that's the price is that 24, you know 85 right because you're doing a market meaning. you want to exit now, he will still sell you and take you out at 24 85, sure you said 24.90, but since it is a market that is not a guarantee, the only guarantee is that your broker will take you out of the position, on the other hand, the limit. so we'll go with this 2490 you're saying I want to get out but I'm only willing to take a loss of up to 10 cents which means if the price hits one of these numbers we're moving so fast that it essentially goes down through your order , which is possible depending on how fast things move and the way the market works, but let's say something, the price, starts to crash like bad news or something goes out in the price, it just, you know, toilet flushing. goes down because a lot of other people are going to try it 2490 you may not have shares there and you may not be able to get out but the problem here is that you are only willing to sell for 24.90 so when the price reaches 24 85 no you're selling price hits 24 50 you're not selling price hits 24 you're not selling because you said well I'm only willing to sell for 24.90 while the market can surely cost you a little more because maybe you won't come out when you thought you would, but at the same time the less you'll get out, so again all orders have their timing in place, but I'm going to surround this one with a stop loss which can be very, very risky. for the situation where if some kind of bad news comes out and you skip what your limit order is, you know who knows how low you can go and your broker will just keep you the stock because you told them well I just want to sell at 24.90, so keep that order in mind, you might know I'm not going to say never use it, but I'm really struggling right now.
Think about a case where that type of stop-loss order that you know, maybe you know it's wise to use them, so these are going to be the top three that you're going to use. Now there's another family of commands called conditional commands, but that's more advanced, maybe me. I'll come back and do another video on that kind of thing, but these will be the backbone of the orders. You know, if you ever watch any of my live trading videos, I mean, these are the orders that I'm using, so it's not like that. like because there are advanced orders, that means you have to use them, you know, the plain and simple order of the planes, like the one you see here, will be more than enough and then finally or finally, I should say that these are not really ordered types , i guess. in a sense they are, but maybe you've seen GTC, this just means that well, today it will be canceled, which means your order will sit there, so if you place a limit order here for 24.90, it will sit there and it will stay there. and next week it will still be there in three months it will still be there opposite until this one.
I don't think there's a universal term for it, but essentially it applies. You know it's good until the end of the day. We'll call it GTE until the end of the day and this is one where hopefully it's self-explanatory if at the end of the day the price, let's say, goes to twenty-five twenty-five oh five twenty-five oh two twenty-four ninety-seven. then it's just fluctuating and never gets to twenty-four ninety at the end of the day. Well then this order will be canceled and you don't have to worry about it, so I see something like this if you forget about the order. it's okay because it will be canceled at the end, I hope you don't forget about the orders, but if you do, it will cancel itself, but this one right here, if you forget, you know you might have a surprise if you don't.
You go back and check with your broker, you know, another three weeks and you're like, "Oh yeah, I forgot about that order and it might be there, who knows, maybe it's filled, but that's what GTC means until be cancelled." For the other type of orders, the words you know are good until the end of the day, so as I was saying, these are not advanced orders, they are very basic, but this is what I use all the time in my daily trading. This is what I was probably going to say that 90% of people use it, but I guess I don't really know if that's an accurate fact or not, but for most people I just use the word majority, most people They use these types of orders and in reality they are all of them. that you need to limit the market and then your stop-loss orders here, now you understand them and how they work.
I just like to remember it, you know, you know, the market. I want it now, limit, I want it, but and then you. I know you combine them with the stop-loss, which when you talk about stop-loss is what you just want to get out of the trade, so I hope that was useful to you, obviously this is the design for more new people, so yes you are. newest and this helped you click the like button if you are new to the channel then subscribe to many other videos and stuff like that on the channel I posted live trading videos, chart analysis videos, all kinds of stuff , so definitely subscribe and Watch the stuff, I hope you found it useful, so go out and enjoy trading with you.

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