How To Buy Stocks On The Stock Market: Step-By-Step Guide

Buy Stocks On The Stock Market: You have decided to invest and start as soon as possible, but you need to figure out how to buy the shares you need to get started.

If so, in this article, we will help you. We will see a step-by-step guide on how to buy shares.

Are you ready? Take note of each of the steps. 

Step 1: Open an account

The first step to buying the shares with which you will start investing is to open an account. You can open the report in a bank or, more recommendable, in an online broker.

The online broker has the advantage that opening a bank account and operating with it is cheaper than working with traditional bank accounts. In addition, the entire process is carried out online.

To open your account , you only need an ABANCA Securities Account. Opening it is free, and you only need your ID, a  smartphone with a camera and fill out a form.

Did you know that you can learn to invest without risk?

You should know that there are simulators, Stock Market Game, with which you can learn to invest without contributing a penny. We give you fictitious money so you know to operate without risk.

Step 2: Add money to the account

You need money to start trading with the account you have opened at the broker you have chosen. Add money to your account to be able to start trading with it.

You won’t have to make a payment to get started. It will be enough to have funds in the ABANCA Securities Account you created.

Also, there is no minimum amount. Whenever you want, you can enter or transfer the amount of money you decide without anyone placing limits on you, neither high nor low.

Step 3: Choose the shares you want to buy

Once you have opened your account and have a balance, you can focus on buying shares.

Since we are sure you do not want to go crazy but rather do things right to obtain the highest possible return, we recommend you study to find out where to invest your money.

You can operate with all the companies that are part of the IBEX 35, the Continuous Market and the leading companies listed on the United States stock market.

Consider diversification

In this step, you must consider a key factor so that your investment has a better chance of success: diversification.

When choosing the stocks, you will invest in, consider dividing your capital into different companies and, if possible, belonging to various sectors and markets.

That way, you won’t be as exposed to a loss in value if a company, sector, or currency falls.

The same with time. Dividing the total amount you plan to invest into smaller parts and making periodic purchases also helps reduce the risk of loss in the long run. This strategy is known as dollar cost averaging.

Step 4: Define the capital that you are going to invest in each company

Once you know how much money you will support and which companies you will do it to, it is time to divide the capital among the actions you have focused on.

Depending on the percentage of the investment you want to dedicate to each company and the price of the shares, you will know how many shares to buy in each company.

Step 5: Buy the shares

Finally, it is time to buy the shares. Depending on the platform you have chosen, the process will be different.

Watch out for these bugs!

In the process of learning to buy stocks, there are some mistakes you should avoid to minimize the chance of losing.

Don’t diversify.

It is important to diversify to increase the probability of profit and reduce losses if a market, sector or company falls.

Do not use stop-loss tools.

Stoploss allows you to automatically sell a stock when it reaches a certain loss level. This guarantees that you will only lose what you have proposed. 

Go behind the price.

What will happen if you get into a stock because it’s rising steadily? That you will have to eat the correction, and you can lose money. Refrain from chasing the price and avoid following the fashion of investing in a particular stock.

Keep losses.

You may be surprised if you are holding a stock that has fallen, thinking it can’t fall further. Avoid your money being sequestered in a store and sell before it is too late.

These tips on buying stocks and the mistakes to avoid in this process will help you make your investments a success.

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