Beginner’s guide: how to trade shares

Are you trying to learn about how to trade shares?

Here are some instructions and tips to give you a basic idea about how to trade shares and get your investment strategy rolling.

First of all, you need to have an account with either a stock broking company or another intermediary licensed with the stock exchange you plan to trade in. Common types of stock broking intermediaries include financial planners and accountants. Many new investors find it very helpful to have a broker on their side as they begin their journey into share trading, but the use of online brokers (normally setup through banks) is becoming more widespread too.

When it comes to providing funds for trading, your broker will most likely require you to have money in a cash management account, to make sure you have enough money available to process new orders.

If you are using an online broker, you will definitely need to start an account with the broker’s associated financial institution before you can start trading.

In terms of the actual buying and selling of shares, there are two commands you can issue to your broker. Shares traded at “market price” will be bought or sold for whatever the prevailing price is at the time the trade goes through. Shares sold at “limit price” are where you instruct the broker as to your minimum sale price or maximum buy price.