How Do You Buy & Sell Stocks?

Stocks are traded on stock exchange by stock brokers and traders. Some of the famous ones are:

  • NYSE Euronext (United States)
  • NASDAQ OMX (United States)
  • Tokyo Stock Exchange (Japan)
  • London Stock Exchange (United Kingdom)
  • Hong Kong Stock Exchange (China)
  • Shanghai Stock Exchange (China)

In this era, stocks are traded electronically online. So for people like us, we need to have an online brokerage account with a brokerage firm to help us buy and sell stock in the stock exchange. Some of the big names are:

  • OptionsXpress
  • TD Ameritrade
  • Thinkorswim
  • ETrade
  • Charles Schwab

What to Look Out for When Choosing a brokerage firm?

Credit Rating
It would be better to check the credit rating of the brokerage firm to ensure that it is less likely to go bankrupt should something unexpectedly happen. Best if the brokerage firm is a public company, so you can easily find out the credit rating from some of the rating companies such as Moody’s, Standard & Poor’s & Fitch Ratings.

Platform Capability
In order to fight your war in the stock market, you need all the below ammunitions.

  • Charting – Use it for you to see the historic price trend and analysis. The MUST have type of charts will be Line Chart, Bar Chart, Candlestick Chart & Volume Bar Chart. For advanced trader/investor, you will need additional technical indicator functions such as Simple Moving Averages, MACD, Relative Strength and etc.
  • Speed – Prices on Stock market move very fast, your brokerage platform must have real time update to the price change of the stocks.
  • User Friendliness – Needless to say, it must easy to use so that you know what to click with your mouse. Most of the advanced brokerage provides a Virtual Trading Platform. It will allow you to train yourself how do buy and sell in a testing platform. So get yourself familiar with the platform before you start any trading and investing.

Efficiency of Transferring Fund – Check how fast and easy it is for you to withdraw and credit your money with your brokerage firm. You don’t want to be cash strapped when you need to withdraw fund.

Credibility – Check the brokerage firm creditability, my favourite site is to do a search on Wikipedia and do some reading on the firm. Or you can do a search on any search engine and enter search such as “Abc Firm Review”.

Brokerages Fees & Charges – Find out and compare the fees and charges among the brokerages. For stock trading, it should not be more than $10 for each trade. Each trade means buy or sell, for example, if you buy a stock today and sell the stock tomorrow, that is consider 2 trade.

Support – Find out the level of support provided by the brokerage. Best if they provide 24-hour telephone support.

Market Access – Some brokerage might not have access to the stock market that you wish to trade. Best to verify this.

Insurance – Check if the brokerage protect your funds with insurance, so you don’t lose all your money should someday if it went bankrupt.

Value Added Services – Check if the brokerage provide any value added services, such as seminars, platform training, dedicated support and etc.

 

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