Want to Buy Stocks Online? 5 Basic Steps for Beginners

Stock investing today is no longer just for the wealthy. With the development of the internet, anyone can start how to buy stocks online from their phone or computer. If you’re looking for a way to enter the world of stock investment, this article will provide you with a detailed roadmap from A to Z.

Step 1: Choose the Right Broker to Start Your Journey

To buy stocks online, the first step is to find a reliable trading service provider. Currently, you have two main options:

Invest through a fund: You do not directly control buying and selling, but instead, fund managers make decisions. This method requires larger capital and higher costs.

Direct investment via a brokerage company: This is the most common way for individual investors because it allows you to freely choose and place buy/sell orders as you wish. Lower costs, and initial capital requirements are more flexible.

In the Vietnamese market today, brokerage options are very diverse. When searching, focus on criteria such as: legally licensed, stable trading platform, good customer support, and competitive fees. Don’t be attracted by promises of high profits; instead, focus on credibility and security.

Step 2: Complete the Account Registration Process

After selecting a broker, you need to perform the registration steps:

Provide basic information: Enter your email and phone number, set a secure password. This step is very important as it relates to your account security.

Verify identity: You will need to answer questions about your trading experience, investment goals, and risk tolerance. This is a mandatory process according to legal regulations.

Complete authentication: Upload identification documents such as ID card/passport, proof of income (if available). This process usually takes 1-2 working days.

While waiting for verification, you can use a demo account to familiarize yourself with the platform. This demo account functions exactly like a real account, but the money here is virtual, helping you practice without risking real money.

Step 3: Choose the Suitable Securities for Your Goals

Buying stocks online is not just about purchasing company shares. The stock market offers three main product types:

Company stocks: If you believe in the potential of a specific company, you can buy its shares. This requires thorough research of financial health, comparing stock prices with similar companies, to decide a reasonable purchase price. The advantage is that good company stocks often increase significantly. The downside is high risk if the company faces difficulties.

Mutual funds and ETFs: These are safer options for beginners because they are already diversified. Instead of buying individual stocks, you buy a small part of dozens or hundreds of companies. For example, an ETF tracking technology will contain small parts of all major tech companies.

Derivative securities: This is a more advanced tool, allowing you to profit even when prices fall. Common derivatives include CFD (contracts for difference), Futures (futures contracts), Options (options), and SWAP (swap contracts). This type requires deep knowledge and is suitable only for experienced investors.

Step 4: Master Trading Orders

Placing trading orders is an essential skill when buying stocks online. There are four main types:

Market order (Market order): You want to buy immediately at the current price. The advantage is that the order will always be matched, but the actual price may differ from what you see on the screen, especially with volatile stocks.

Limit order (Limit order): You specify a particular price at which you want to buy or sell. For example, you want to buy Apple at a certain price $150 then the order will only match when there is a seller at that price. The advantage is price control, but the order may never be matched if the price never reaches your target.

Stop-loss order: Used to cut losses. When the stock price drops to a certain level, the order will automatically sell to limit losses. This is a way to protect your capital in bad market situations.

Trailing Stop-loss: An upgraded version of Stop-loss. Instead of a fixed price, the stop-loss level automatically adjusts according to the current market price. This helps lock in profits when prices rise but still protects if the price reverses.

For highly volatile stocks, use Limit orders. For stable stocks, Market orders are a faster choice.

Step 5: Build a Diversified Portfolio - Asset Preservation Skills

The final step, but also the most important, is diversification. This is not just a tip but a golden rule in investing.

Diversify across different companies: Instead of putting all your money into one stock, split it into many companies. If you want a ready-made tool, ETFs or indices like S&P 500 are excellent choices—you own a small part of the 500 largest US companies without analyzing each one.

Diversify across countries: Vietnamese stocks have great opportunities, but balance with international investments. During the COVID pandemic, while stocks plummeted, gold markets increased. If you have a diversified portfolio (stocks + gold + bonds), you will suffer less loss.

Diversify across asset classes: Not all your money should go into stocks. Consider bonds (safety), gold (inflation hedge), or cash (for opportunities when the market drops).

However, diversification does not mean buying randomly. Choose quality stocks, funds, and assets. The easiest way is to select indices or funds managed by professionals, as they have already chosen good stocks for you.

Important Tips When Buying Stocks Online

• Start small: Don’t invest all your savings into stocks. Begin with a small amount and learn from experience.
• Learn before playing: Use a demo account to practice first.
• Pay attention to fees: Trading fees, account management fees can eat into your profits. Compare brokers carefully.
• Be patient: Stock investing is a long-term game. Don’t expect to get rich quickly.
• Manage risks: Always use Stop-loss to protect your capital.

Conclusion

How to buy stocks online is no longer a mystery. With the 5 detailed steps above, you have a clear roadmap: choose a reputable broker, open an account, explore products, master order types, and build a diversified portfolio. Each step is important and contributes to your long-term success. The key is that you must be willing to learn continuously, because the stock market is always changing. Wishing you success on your investment journey!