Buy Stocks Today: Guide for Beginners [2021]
Is it worth Buying Stocks nowadays? Those who start Trading Online often start with the stock market but do not always do it correctly. This guide explains in detail how to Buy Stocks without making mistakes and without cheating.
We also talk about the platform that should be used to buy shares in a safe, intuitive way and without paying commissions.
An example? eToro which even allows you to automatically copy the best investors in the world, to obtain their own results. You can sign up for free on eToro by clicking here (more on that later).
Index
What are Stocks?
Before starting, it is good to make a clarification: what are Stocks? A Stock represents the share of the capital of a company listed on the stock exchange. Possession of a stock gives the right to receive a corresponding share of the company’s dividends and allows, in theory, to participate in meetings and therefore in strategic decisions.
For a small investor, however, these aspects are by no means significant. Decisions, in fact, are made by the large shareholders (and often very far from the shareholders’ meetings).
What really interests small investors is the stock price. Depends on what? In general, the price of a share is always related to the market’s perception of the company’s performance.
In practice, if the market thinks that the company will have good results in the future, the price goes up. If, on the other hand, it thinks that the results will be negative, then the price will go down.
How to Buy Stocks without scams
The stock price rises and falls: there are volatile shares and others that are less so, but in general no share is destined to always rise.
What happens when you buy a stock and the price falls? Simple, you lose money.
Does this mean that it is not worth buying stocks? Absolutely not, indeed, trading stocks can be really very profitable, you just need to know how to do it.
Many beginners think that the only way to make money with stocks is to buy them. Absolutely wrong. Those who work with the best trading platforms have the ability to perform 2 operations:
- Buying stocks to make money when the price rises
- Short-selling stocks to make money when the price falls.
Short Selling is a purely speculative operation that generates profits when the price of a stock falls. It is not necessary to have bought before selling short (for this reason it is called short).
At this point it is clear that those who operate intelligently have the opportunity to always earn, whatever the market does!
There are 3 ways to buy shares:
- Security Brokerage companies that charge high commissions and require high investment assets.
- Banks that charge high fees.
- Online trading platforms that do not charge commissions and are also available for small capital.
Best Platforms to buy stocks
What are the best platforms to buy stocks? We have selected some of the best platforms that have the following characteristics:
- They are safe and reliable: the only platforms for trading on the stock exchange that are reliable are those authorized and regulated. In this case, in fact, they are required to comply with the strict European regulations that protect the invested capital. They are also subject to the supervision of the supervisory authorities.
- They are free and do not charge commissions: especially when trading small amounts online, paying commissions is a real financial suicide. For example, if you start with 100 euros and pay 7 euros per commission transaction (as on Fineco), you burn the entire capital in less than 15 transactions, assuming they all close in profit. We therefore only recommend commission-free platforms.
- They are easy to use, even for beginners.
We have included in the table below the characteristics of the best platforms for trading stocks:
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Platform: etoro Min. Deposit: 50€ License: Cysec |
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Platform: xtb Min. Deposit: 100€ License: Cysec |
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Platform: iqoption Min. Deposit: 50€ License: Cysec |
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Platform: ubrokers Min. Deposit: 250€ License: Cysec |
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Platform: trade Min. Deposit: 100€ License: Cysec |
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72.30% of retail CFD accounts lose money
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Platform: forextb Min. Deposit: 250€ License: Cysec |
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eToro
Many beginners consider eToro to be the best option for buying stocks (and trading online in general) if you are really starting from scratch. What is the advantage of using eToro?
In addition to being completely free, safe and easy to use, eToro is the only trading platform that allows you to copy, in a completely automatic way, what other traders are doing.
Thanks to the patented Copytrader software it is possible to easily identify the traders who have earned the most in the past with the least risk. These traders can be selected for copying and it will be the software that will replicate all their trades in real time.
The advantage for those who copy is twofold: immediately obtain the same results as the best traders in the world and can learn online trading by observing what the best are doing. Indeed many beginners consider eToro as the best option to learn online trading, better than any trading book.
You can sign up for free on eToro by clicking hereIf you want to know more, you can read our full eToro review here.
ForexTB
ForexTB is the other great alternative for those who want to start buying stocks without the risk of being scammed and without paying commissions. ForexTB provides an extremely simple and intuitive platform.
Even beginners can operate immediately without any kind of problem. All members receive direct phone assistance from a real stock market expert who provides precise information. Making mistakes is impossible.
Anyone who wants to learn all the secrets of investments has the opportunity to download an excellent ebook for free that explains, in detail, how to make money.
The ebook has had a tremendous success (with hundreds of thousands of downloads) precisely because it is the only that really explains how you make money with stocks (and with other financial investments) and above all it does so in simple language and that everyone can understand. And then it’s completely free, while other guides are paid and can have high costs. You can download the ForexTB ebook by clicking here.
The benefits of ForexTB don’t end there. All members can use the platform in demo mode, ie with virtual money. In practice, this is a simulation. In this way they can easily accumulate experience and experiment without any kind of risk. ForexTB is Juventus official partner.
You can sign up for free on ForexTB by clicking hereRead our full ForexTB review to know more about this broker.
Buy and Sell Stocks in the day
In this paragraph we are referring to investing in short-term stocks: many of the novice traders who are successful with eToro or ForexTB are engaged in buying and selling stocks in the day.
This type of trading is ideal for those who have a very small capital (between 100 and 250 euros) and are still beginners.
With a wise use of leverage (made available by the best trading platforms we have suggested) even a small amount can give great results.
Among other things, buying and selling stocks on the same day guarantees the possibility of carrying out various operations with the same capital, further multiplying the possibilities of profit. In short, a convenient way to play on the stock market, also suitable for those with very little money and no experience.
Buy Stocks in the long term
The other option for those who want to invest in shares is to buy long-term shares. In this case, it is advisable to weigh the investment extremely carefully and you must also have cold blood to resist the temptation to sell when the share price collapses.
In practice, it is a long-term investment in which you buy a share and forget it (perhaps remembering once a year to get the dividends credited. Assuming they exist).
Is it better to buy and sell stocks during the day or to make long-term investments? There is no one-size-fits-all answer but it mostly depends on capital.
If you want to start investing with a small capital (from 100 to 250 euros), then it is better to buy and sell within the day. If, on the other hand, you have a very high capital, then you should also consider a long-term investment (but nothing prevents you from supporting, even in this case, a speculative activity in the short term).
Buy Amazon Shares
Buying Amazon shares is usually the first thing beginners do when they start buying stocks. Why? The shares of Amazon have experienced a frightening growth: whoever had bought $ 1000 of these shares in the IPO phase would now find themselves with a capital of more than one million.
Why do we do this example? Precisely because many beginners are tempted to buy them! It’s not a bad idea in itself but one must always keep in mind that no financial stock is destined to go up all the time, not even Amazon shares. Jeff Bezos himself, founder and owner of Amazon, admitted that within 30 years the giant could go into crisis.
The solution is to trade intelligently, always rationally deciding whether to buy Amazon shares or sell them short. Or you can always decide to copy the best traders on eToro and let them decide what to do. They are usually right.
Buy Juventus Shares
Another particularly interesting example is that of Juventus shares. It is a company with an overall small capitalization and with no exceptional earnings prospects.
Yet there are traders who rush to buy Juventus shares. In this case, the emotional aspect has a strong weight: the small traders who buy Juventus shares are often fans.
This is also a wrong attitude: shares are bought to make money, not to follow a sporting passion.
Buy oil-related Stocks
To complete our overall picture on stocks, let’s talk about oil-related stocks. Investing in this type of stock, for example buying Aramco shares, allows you to make a bet on the oil trend.
The value of oil shares, in fact, is closely linked to the trend in oil prices.
If you think oil is going to rise in price, then you should buy oil stocks. If you think it is going to decline in price, then you should short sell these shares.
We can say that buying oil-related stocks is in all respects equivalent to buying oil, except that it is easier and more intuitive and therefore recommended for less experienced investors.
How to manage risks
Is buying stocks risky? Of course yes, like all financial investments, buying stocks can also present risks. The beauty is that you use intelligence and choose the best trading platforms, these risks can be very limited.
How? First, by doing money management. This means not using the entire capital deposited in the trading account (for example 250 euros) on a single transaction.
It is always advisable to divide the capital into small shares and use only one of these small shares on each operation. In this way, even if an operation were to generate losses, the impact on the overall capital would be negligible.
It is possible to operate with such small amounts because the best trading platforms guarantee the possibility of using financial leverage.
Another fundamental tool for limiting risk is Stop Loss. A stop loss is a precise indication of the maximum level of losses that you are willing to suffer on a single transaction.
The best platforms allow you to set the stop loss (and trigger it at the right time). Using the stop loss is a spectacular advantage for risk control, too bad that many novice traders do not know this tool or do not know how to use it.
For this reason we always recommend studying this fundamental ebook (which is also free) which explains how to best use all the trading tools.
Best Bank to Buy Stocks
Europeans have been accustomed to using banks for their financial investments for decades. The results are there for all to see: an endless series of scams and scandals of all kinds, which have reduced hundreds of thousands of savers to the streets.
And even when you are not undergoing a real scam, there are always very heavy commissions to be paid on any operation you do.
That’s why we don’t recommend using Europeans banks to buy shares. There is no better bank than the others because they all charge heavy fees.
Much better to operate with the independent investment platforms that we have presented in this article.
In addition to being commission-free, they are very safe and transparent.
Conclusions
Buying shares is one of the best speculative investments: it is not as complex as you might think, a small capital and a little commitment are enough to start without problems. To trade shares, we recommend that you only use secure and authorized platforms.
We made a careful selection of the best platforms, choosing the one that, in addition to security, offer convenience (only platforms without commissions) and simplicity.
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Platform: etoro Min. Deposit: 50€ License: Cysec |
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Platform: xtb Min. Deposit: 100€ License: Cysec |
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Platform: iqoption Min. Deposit: 50€ License: Cysec |
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Platform: ubrokers Min. Deposit: 250€ License: Cysec |
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Platform: trade Min. Deposit: 100€ License: Cysec |
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72.30% of retail CFD accounts lose money
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Platform: forextb Min. Deposit: 250€ License: Cysec |
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A Stock represents the share of a company. Its possession gives the right to collect a proportional share of the profits generated by the company itself.
Buying a Stock means getting hold a company’s Share. For those who trade with CFDs, it simply means betting on the growth of the share value.
No, there are times when it is much more convenient to sell short to make a profit if the value of the stock falls.
For beginners who are approaching the world of stock market investments for the first time, it is worth starting with eToro. Not only is it free, easy to use and secure, it even allows you to automatically copy the best investors.
