How to Trade Stocks

Contributor, Benzinga

Want to claim 6 FREE stocks? Head over to Webull to get started.

Pursuing a full-time career as a stock trader or want to earn passive income? An online trading course is a great way to acquire the skills and knowledge you need. Classes are available for all skill levels and budgets, so you can find the perfect fit with ease. 

How to Trade Stocks

The process of trading stocks either occurs through an online broker or a personal broker you’ve built a relationship with. Use these steps to trade in stocks and get the results you deserve.

1. Determine Which Stocks You Wish to Purchase

Based on research and trends, you can determine which stock to buy. Remember, however, to ensure that the broker you have chosen supports the exchange where you wish to invest.

2. Set Your Budget

Create a budget that helps you cap your spending. You don’t want to spend all your money at once, but you should also invest with a goal. Investing without considering how much money you have can be dangerous. Also, you should not invest any money you are not prepared to lose.

3. Choose How Many Shares to Buy

Use your budget to determine how many shares you wish to buy. Remember, you can increase or decrease your stake at any time. This is especially helpful if the stock drops in value but you believe it will rise once more.

4. Choose an Order Type

When you place a traditional buy or sell order, it occurs immediately (or as immediately as possible.) You can choose bracket orders that buy and sell as specified prices, or you may set a limit order that only buys or sells at a price you’ve set. There are other order types like an all or nothing that sells everything or the order doesn’t process, etc.

5. Complete Your Order

When you complete your order, take note of it in your personal records. Review your dashboard to ensure that the result of the order is what you intended. At this point, you must decide if you want to invest more money, sell a different asset or wait for more information.

6. Sell for a Profit

Remember, you haven’t taken a loss until you sell. This means you should wait for the price of the stock to rise and take a profit when you need the cash or believe the stock cannot get any more valuable. Simply repeat the process above to complete a sell order.

Why Learn How to Trade Stocks

There are several benefits to learning how to trade stocks

1. Boost Your Investment Acumen

The best day traders explore ways to advance their skills and get ahead of the competition using proven strategies. They also know how important it is to make confident decisions and act swiftly to capitalize on opportunities and win at the stock game. 

2. Earn Passive Income

It never hurts to have a stream of income on the side without having to exert much effort. Day trading requires you to be vigilant of market conditions, but you can make your money work hard for you without being glued to the computer or smartphone for hours on end. 

3. Build Wealth

A retirement plan from your employer isn’t the only way to build wealth. Day trading can help you reach your retirement goals faster so you can live comfortably in your golden years. 

You can also use the profits generated from stock trading to pay off debt, save more and establish a solid financial foundation for your family. 

Best Online Stock Brokers

Compare the best online stock brokers to get started with a trading account.

get started securely through Webull’s website
Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
get started securely through Moomoo’s website
Best For
Active Traders
N/A
1 Minute Review

Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.

Get started right away by downloading Moomoo to your phone, tablet or another mobile device.

Best For
  • Cost-conscious traders
  • Active and Advanced traders
Pros
  • Over 8,000 different stocks that can be sold short
  • Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
  • No minimum deposit to open an account.
Cons
  • No chat support
get started securely through eTrade’s website
Best For
Desktop Trading
N/A
1 Minute Review

E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.

Best For
  • Active traders
  • Derivatives traders
  • Retirement savers
Pros
  • Sophisticated trading platforms
  • Wide range of tradable assets
  • Exceptional customer service
Cons
  • Limited currency trading
  • Higher margin rates than competitors
  • No paper trading on its standard platform
get started securely through Interactive Broker’s website
Best For
GlobalAnalyst Product
N/A
1 Minute Review

This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.

Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.

Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.

Best For
  • Price earnings growth valuations
Pros
  • Easily evaluate investment opportunities
Cons
get started securely through CenterPoint Securities’s website
Best For
Momentum traders
N/A
1 Minute Review

CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.

Best For
  • Intermediate to Advanced traders
  • High-volume traders
  • Momentum traders
  • Short sellers
Pros
  • Unrivaled access to short inventory
  • Flexible order routing for improved executions
  • Discounts for active traders
  • Advanced platform with fast executions
  • Reliable customer service
Cons
  • Not designed for beginner or low-volume traders

Courses to Learn How to Trade Stocks

If you’re new to stock trading, start with these beginner courses. 

1. How to Trade Stocks by Benzinga

  • Who it’s for: Beginners
  • Price: On sale

Benzinga’s take-action course, How to Trade Stocks, will help make money in the stock market right away! The course will help you demystify the investing process, give you basic investing tools you can use and help you learn how to establish and monitor your personal portfolio

Get this course

2. Day Trading 101: A Beginner’s Guide to Day Trading Stocks by Udemy 

  • Who it’s for: Beginners
  • Price: On sale

Learn what it takes to get started as a day trader with this introductory course from Udemy. It covers stock market basics, price fluctuations, chart patterns and so much more. 

Day Trading 101: A Beginner’s Guide to Day Trading Stocks is divided into 4 components:

  • The Basics 
  • Chart and Analysis
  • Company Fundamentals 
  • Trading Psychology and Managing Risk 

A seat in this course includes full lifetime access to 21 lectures, 3 articles and 1 downloadable resource. You’l also complete quizzes to test your comprehension as you work through the modules. 

The class is led by Travis Rose, an experienced day trader and investor.

Get this course

Choose the Best Trading Course for You

You don’t have to spend hours sifting through books and articles to find the knowledge you need to be a successful day trader. Consider one of our beginner courses to approach day trading in a fun and interactive way.

If you already know how to trade stocks but want to beef up your knowledge, start with an intermediate or advanced course. The investment of your time and money will be well worth it.