Trading 101: How to Buy Stocks

– So you just heard about
this stock market thing, you wanna buy some stocks but,
hey, how do you even do that? I see all these different order types, what do they mean? Let’s talk about it. First thing, before you can even do what I’m about to talk
about in this video, you need to take an initial step and that initial step is
signing up for a brokerage. And, with the brokerage, you
wanna do an online brokerage. Don’t go to your community
bank or something like that and then go through their brokerage cuz their fees are going to be crazy. So online brokerage, I’ll put a link in the description below. I’ve put together a guide on how to select the proper
brokerage for your situation. We’ll also flash up a
link on the screen here. So that will be down in
the description box below. So that’s step one,
first gotta get aligned with an online brokerage. After, you get signed up, maybe
you are already signed up, you’re gonna have a bunch of
different choices for orders, in terms of how to buy and how to sell. So that’s what I wanna
break down in this video. So we’re just going to take it one by one and, hopefully, when
you get through it all, you’re gonna understand
what all those little drop down options mean, when
you click that little arrow and you see a bunch of choices. Maybe there’s just boxes
you select or whatever, but regardless, hopefully,
you’ve seen all of these because they are very commonplace. Just for argument’s sake,
we’re gonna talk about a stock that is currently trading at $25. So $25, current price of stock. We’ll just call it ABC. Now, the first type of order you may see is what we call a market order. So, what does market order mean, if you select that option? That means that I just want it and, not only do I want
ABC, I want it at any price. It does not even matter to me,
I just want into the stock. I want to own shares. I want to buy it, not in
a few minutes, right now. So market is just, saying I want it now. And you’re gonna pay whatever
price the market gives you. So if this happens to fluctuate up to, let’s just say, $25.02. So if that price goes up
$25.02 for whatever reason, maybe like a split second
before you click the buy button and it goes up to $25.02,
it doesn’t matter, you’re getting in at $25.02. Let’s just say it drops to $24.97 right before you buy. It doesn’t matter, you’re getting in. You want it now so it’s going to give you whatever the market has
the current price at. So that is what a market order is. Next type of order, a limit. And all strategies are different but a limit is, more times than not, the order that you want to be using because market orders,
especially in penny stocks or illiquid markets, can get
you in quite a bit of trouble. But, also at the same time, market orders do have their place in the market. So I don’t wanna say this is like a black hole or anything. They have their time and place. But a limit order is essentially saying, I want it but. So what is the but? The but is saying, yo,
I really do want that but I’m only willing to
pay a certain price for it. So, again, if the stock is trading at $25 and, you’re like, I do want into ABC, but I don’t want in at $25, I’m only willing to pay $24.90. You would select limit order and, then, when you select limit, your
broker is going to ask you, okay, well, what is the but, meaning what price are you willing to pay? So, in our example here, you would put in a limit order for $24.90. All that means is, you’re not going to get any shares of this, unless
the price hits $24.90. So, if the price drops
down, it hits $24.91, you didn’t get any shares. If the price goes up to $25.50,
you didn’t get any shares. You’re only willing to pay $24.90. So you put a limit on the order, that’s what a limit order is. The next type of order,
very, very important type. Stop-loss. Now, the thing here is,
stop-loss only pertains to you if you’ve gotten in. So either this or this order
type has already taken place in order for a stop-loss
order to be relevant to you. And the stop-loss is saying, I want out. Now, the name’s a little
deceiving cuz it implies that maybe you’re stopping a loss. But, in other situations,
especially when you get more advanced trading,
a stop-loss can still take you out of a position. But it’s not really stopping a loss cuz you would already be making money. So it’s not like this pertains
to only losing trades. This is just a way, again, of saying, I want out of the trade. That could be a losing trade. It could already be a profitable trade. But you just want out. Now, within this family,
there are two types. And, hopefully, these
both kinda sound familiar. There is a market stop. And there is a limit stop. Market is saying, I want out, now. So it is just gonna get you
out of the trade whenever. So let’s say you get in right here at $25, and you’re like, you know what, I only want to risk 10 cents. So you could put in a market at $24.90 and, if the price goes
down there, it hits $24.90, bam, your broker is gonna sell your shares and you’re gonna get out. But market means, no matter what, so if the price really
starts to go down fast, maybe by the time all the
little computer algorithms do their thing, the price is at $24.85. Well, because you are doing a market, meaning you want out now,
it’s still gonna just sell you and get you out at $24.85. Sure, you said $24.90 but,
because it’s a market, that’s not a guarantee. The only guarantee is your broker will get you out of the position. On the flip side, so we’ll go with this
$24.90, you want out there, but if you choose limit, you’re saying, I want out but I’m only willing to take a loss of up to 10 cents. Meaning if the price does
one of these numbers, where it’s just moving so fast
that it just, essentially, goes down through your
order, which is possible depending on how fast things are moving. That’s just the way the market works. But, let’s just say, the
price just starts to collapse, like bad news or something comes up, and the price just, whoosh, you know the toilet flush, down it goes. Because a lot of other people
are going to try at $24.90, you just may not have any shares there or you may not be able to get out. But the problem here is, well, you’re only willing to sell for $24.90. So what the price hits
$24.85, you’re not 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. Sure, it can cost you a little bit more, because maybe you don’t quite get out, when you thought you do. But at least you get out. So, again, all orders
have their time and place. But I’m just gonna circle
this one, a limit stop-loss can be very, very risky for this situation where, if some sort of bad news comes out, and, if it skips over
what your limit order is, who knows how low it can get, and your broker is just
gonna hang onto the shares because you told them, well,
I only want to sell at $24.90. Keep that order in mind. I’m not going to say to
never, ever, ever use it. But I’m really struggling right now, off the top of my head,
to think of an instance where that sort of stop-loss
order maybe wise to use. So these are going to be
the three main ones you use. Now, there’s a whole
other family of orders called conditional orders,
but that’s more advanced. Maybe I’ll come back and do another video on that sort of stuff. But these are going to be
the backbone of the orders. If you ever watch any
of my live trade videos, these are the orders that I’m using. So it’s not like because
there’s advanced orders, that means you have to use them. The plain and simple orders,
such as you see right here, are gonna be more than enough. And then final, or finally I should say. These aren’t really order types. I suppose in a sense they are
but maybe you’ve seen GTC. This just means good ’til canceled. Meaning, your order is
gonna sit out there, so if you put in a limit order for $24.90, it’s gonna sit there and sit there. And, next week, it’s gonna
still be sitting there. Three months from now, it’s
still gonna be sitting there. Opposed to, this one I don’t think there’s a universal term
for it, but, essentially, it implies it’s good
’til the end of the day. So we’ll call it GTE. Good ’til end of day. And, this is one, where hopefully that’s pretty self-explanatory. If, by the end of the day, the price, let’s just say goes to $25, $25.05, $25.02, $24.97, so it’s just fluctuating,
it never quite hits $24.90 by the end of the day,
well, then this order is going to be canceled. And you don’t have to worry about it. So, obviously, something like this is if you forget about the order. Then it’s okay cuz it will
get canceled at the end … Hopefully, you’re not
forgetting about orders, but if you do, it’s gonna cancel itself. But this one here, if you forget about it, you may have a surprise
if you don’t come back and check your broker
for another three weeks and, you’re like, oh yeah,
I forgot about that order. And it maybe sitting out there, who knows, maybe it’s been filled. But that’s gonna be what GTC stands for: good ’til canceled
opposed to the other type of orders where it’s just
good up until the end of day. So, like I was saying, these
are the, not advanced orders. Very basic but this is
what I use all the time in my every day trading. This is what probably, I was
going to say 90% of people use, but I guess I don’t really know if that’s an accurate fact or not. But the majority of people,
I’ll just use the word majority, majority of people do
use these order types and they’re really all that you need. So, limit, market and then
your stop-loss orders here. You get a grasp of
these and how they work. I just like to remember it as these, market I want it now, limit I want it but … And, then, you combine
these with the stop-loss which when you’re talking
about stop-losses, you just want out of the trade. So, hope you found this helpful. Obviously, this is designed for more of the new people out there. So, if you are newer,
and this helped ya out, please click the like button. If you’re new to the channel, then by all means, subscribe, lot of other videos and
such on the channel. I release live trade videos,
chart-analysis videos, all sorts of stuff. So, definitely, subscribe
and check things out. Hopefully, you found this helpful. So get out there and happy trading.

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100 thoughts on “Trading 101: How to Buy Stocks

  1. Robinhood is always talking about how free it is, would you trust the app? Do you NEED to sign up for an online brokerage to invest in stock?

  2. Share with your subscribers:

  3. So.. If the limit stop-loss was set at $24.90 a share, but it goes up to $25.02, do you get to sell? Does that only stop the sale if it's under $24.90?

  4. I don't know if this is the advanced trading you alluded to, but a lot of places these days use Market, Limit, and Stop both for Buy and Sell. So if I suspect a stock will gap up early in the day but want to make sure today is that day, I can place a Stop Loss Buy above the market price to buy if it starts moving up.

    Basically (for viewers) it goes: Market is buy/sell at whatever the price is.

    Stop is buy/sell and it's already moving a direction and you expect it to keep going in that direction. So when a stock starts to go up, but you want to make sure it's really going up, you place a stop buy order for a price further along in that direction. So you're pretty sure your dad is going to Canada, and you want to get to Canada, but you want to set your pickup spot out of town on the highway in case your dad is only driving to the store.

    A limit is a buy/sell that you expect to reach a point and reverse. You think it will move up but you suspect it isn't quite done moving down yet so you place a limit order to buy below where it's at. So your dad is still going to Canada but you don't want to go to Canada. You're trying to get him to take you the other way to your house before he turns around to go to Canada. It's a risk because at any point on the way to your house, he may just turn around and drive the other way.

    I'm sure that helped no one but it sure was fun to think up.

  5. New to trading block, this video was very helpful. Just set up a robinhood account, building my knowledge to make informed trades.

  6. Taking a serious look at wanting to get started buying and selling stocks but I only have a basic understanding of how it works. Came to your channel for tips and how to.

  7. If you do a limit stop/loss does that sell 100% of the stock or can you put a percentage of that stock to sell?

  8. So I’m currently using M1 Finance. I’m not buying or selling. I deposit 10$ here and there and just let it do the job. I’ve seen reviews on how people put money and in like a week or 2 the money they have goes up ? How if they not buying or selling? And how can I reach that ? Honestly idk anything stock. I just know to make sure it have dividend, stay away from efs ( I believe that what it is) and not to rebalance my account until the end of the year because of taxes. Is M1 Finance like investing into stock already?

  9. I’m 16 but I would like to start investing. 1. Is there an age limit? 2. What’s the pay off 3. How do I start? I need answers I’m open to advice and your experiences.

  10. $580,000 ROI/Gains expected with Cannabis/CBD stock (FTEG) currently dirt cheap and 29,000,000 of (FTEG) shares acquired for fractions of a penny and then sold for JUST 2 cents Breakout in price means $580,000 Profit /

  11. What should be my take profit percentage and my stop loss percentage if I want to make long term investment for five years?

  12. Is there any services to buy stocks? I live in Morocco and most services are not available in my country.

  13. Question #1 so $25 is given for a stock do i have to give more money every month or year.

    Question #2 do i lose my $25 if the stock fails,,, i wouldn’t mind

    Question #3 how much money would my $25 make in like a year would it be like 5 cents a year or hundreds or thousands if the stock 📈 goes up

    What dose a stock give me

  14. Hey! This is a great video! I am 13 and trying to learn stocks. However I have a question. On a Limit-Stop Order, will the broker only sell the share if the price is EXACTLY at your limit? Also if the price declines below the your limit, can you then sell it even though it will be a bad investment?

  15. Watched this guy a while back. Wanted to recover some of the basics. It took a bit to find him but nonetheless was worth it for his well put explanations over other trade experts. As always great work Clay

  16. So Stop-loss order is considered also as I want to sell the stock on this certain price?

    When my purchased stocks goes up on a certain value that I want… then i can set my Stop-loss Market order on the price I want to sell my stocks to make a profit?

  17. You forgot to mention that this tutorial is for short-term trading. You said that you're struggling to think on the top of your head of a situation where selling at a limit – long term trading is a great way to set a stop-loss limit.

  18. So if i place a limit order i only get the share if the price hits the price i was only willing to pay ?

  19. WTF I thought buying on stock market is like buying food wholesale at a stock market, and the item will be delivered to your house. I thought it works like an auction thing, where someone says: Huge dildo for sale for $50,then some girl buys it. But it is actually simpler than I thought it would be. Works like trading during the middle ages.

  20. I'm confused with limit order. If the price drops to my desired choice only after a week, would the share still be purchased? Or would the limit order be expired?

  21. Hi there, I never buy stock in my life. I want to start buying stocks but I do not understand, for instance, after I bought a stock I can sell it any time or there is a contract on long term or short term stock which I have to hold it until the contract is up? if I buy a long term stock and if I need money can I sell it when I need money or I have to wait??? thank you. please explain how it works!!!

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