Trading in stocks online is not like shopping at your local major retailer, where prices are set. Because investments are priced in real time through active bidding between buyers and sellers, there are techniques to buying and selling.

When dealing with investments, you have five main ways to buy or sell them online:. This is the most common type of order.

You tell your broker to sell your shares at the best price or to buy shares at the current price. Because these orders are executed almost immediately and are straightforward, they typically have the lowest commissions. The order will execute only if your price is reached. Limit orders are filled only at the price you set. If the stock falls further than the price you set, the broker might be able to sell only some of the shares, or none, at the price you set.

Similar to limit orders stop market orders let you set a price you want to buy or sell shares at. When a stock hits the price you designated, the order converts into a market order and executes immediately. This time, though, all your stock would have been sold.

How to Trade in Stocks Online - dummies

Stop limit orders are customizable. First, you can set the activation price. It would work like this: Regular limit orders are either executed or they expire.

Stocks Trading - dummies

Trailing stop orders get around this problem by letting you tell your broker to sell a stock if it falls by a certain number of points or a percentage. Some investment professionals suggest never letting a stock fall more than 10 percent below the price you paid.

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If this sounds like a good idea to you, a trailing stop could work for you. Some brokers charge extra for limit orders, so check the commission fees before you start trading.

And some brokers, such as Buyandhold. Many people buy the same stock many times. Each time you buy, that bundle of stock is called a lot.

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You can enter an order for a stock that is active only for the day you place the trade. You can also enter orders and let them stay active until you cancel them.

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