How to buy stocks - The goal when investing in stocks
The reason to invest in stocks is that unfortunately there are currently no major alternatives for building wealth. In the age of low interest rates, we have almost no choice but to deal with the topic of stocks. There is certainly a risk associated with it. But if you are well informed in advance and do not "riot" invest in a headless manner, the risk is limited. Because the goal should be that we generate a nice return. In addition, when investing in stocks, start with a medium to long-term investment period.
How and where do I open a depot and what are the costs?
To be able to buy shares at all, you need a clearing account and a deposit with a bank, an online broker or a direct bank. When selecting the depot operator, we would like to point out that In most cases the online brokers and direct banks are much cheaper than the classic banks with branch network. This is reflected both in the account management / custody account fees and in the purchase / sale commission (also called order fee). With many online brokers or online banks, you do not pay any account management / custody fees! Here it is really important to read the individual offers from the providers smallest detail to compare! Here you can find some comparison portals:
The clearing account is used to "pay" the files ordered. The depot has the property that all your purchases are managed in this depot and you can see at any time when, how much and at what price the respective share was purchased by you. At the same time, you can also see the difference between your entry price and the current price. So you always have an overview of the development of your shares.
I am interested in a share. How do I find it?
You can usually place the order to buy shares at a bank in person via an advisor, by phone or email. With online brokers or direct banks, you can easily buy securities online. You only need the name of the company or the securities identification number (WKN or ISIN number) of the respective share that you want to buy.
Example: Looking for a share in my bank account
Order fees and how do I buy a share?
For your orders, i.e. for buying and selling stocks and other securities, there are various fees, also known as order commission. Depending on the bank / broker, you usually pay a fixed order fee per share purchase and, in some cases, a volume-dependent commission. In addition, a commission (approx. 0.25%) can be added for the selection of the stock exchange (Frankfurt, Stuttgart, Düsseldorf). With direct trading, this commission does not apply to many providers. Direct trading means that the purchase not only takes place during the exchange's business hours and via an employee of the exchange, but is also processed online via the computer. This has the advantage that you can still buy and sell after the market has closed. Buy and sell stocks never without a limit for her Buy / sell price specify. Otherwise you could buy too dearly or sell too cheaply due to sudden price fluctuations.
Example: stock exchanges
Example: how do I buy a share
Limit losses but how?
With a so-called Stop-loss order, which is placed like a normal securities order, you can specify a price below the current share price at which a sell order for the paper is to be triggered automatically. The point behind it: You can secure profits you have already made and limit losses.
The specified stop price does not represent a price guarantee: If the price reaches this mark, the order is automatically converted into a sell order. This means that the selling price can also be slightly below or (which is less common) above the stop price.
Which brings us to the most important question: How big do you choose the distance between the stop-loss mark and the current price? It should not be set too close to the current course. Otherwise it could happen that the stock is sold due to one / several weak days and you would no longer benefit from the rise in the stock. That would be annoying.
If the spread between the current share price and the self-set selling price is too large, you may accept unnecessarily high price losses before the order is triggered. It is not easy!
First of all: There is no ideal rule of thumb. Most advisors give a range of 10 percent below the current rate called that for standard values is suitable. With more volatile papers such as TecDax stocks or small companies With a low share volume, the price gap should be selected accordingly higher, for example at 20 percent. In any case, the range is to be selected depending on your own risk tolerance, the fluctuation intensity of the share and the current market situation.
It usually makes the most sense to use the historical share price as a guide when choosing the stop price. The price fluctuations per day are shown. If you convert the daily fluctuations, which appear in €, into percent, you can easily get an overview of the exchange rate fluctuations and thus calculate the appropriate stop-loss interval. If the share holds a relatively constant price over several days / weeks, it is called price support. A stop-loss level that is set just below clear price support can save a lot of losses.
With a stop-loss strategy, it is important to gradually adjust the stop price upwards when the share is in an upward trend, in order not to let the price gap between purchase and current price become too large. This can be set for most depots so that it is automatically adjusted. The validity of the stop-loss order can also be selected as required. But here too, a sure instinct is required. Warning: some banks still charge fees for every order change.
Think about the following things:
How much money do you have available to buy shares? It may PLAY MONEY ONLY be. A loss must not endanger your existence.
Rather, start with small amounts of your stock purchases. Only invest money that you own Not need at short notice. That way, if your stock goes in the wrong direction, you don't have to sell at a loss because an expensive repair might be due. With many providers you can also create a model portfolio so that you can gain experience without having to invest any money.
Securities trading on Credit is absolutely taboo!
What risk are you willing to take?
Determine before you buy what risk you are willing to take. A realistic rate of return is 5-10% per year. You can minimize losses with a stop-loss order. Since share prices can be subject to strong fluctuations, 5,000 euros could quickly become not only 8,000 euros, but also 3,000 euros. Keep your nerve at times like this!
Attention: The higher the supposed return, the greater the risk!
If a share is advertised in the media or praised in the sky, the starting price is usually too high for us as “normal consumers”. Because then the Provis have long since bought and are often on the go again to take the profits with them.
Avoid rookie mistakes
Many beginners invest their money in just a Securities and that is often very speculative. Of course, speculative stocks are attracted by the supposedly high return. Unfortunately, this usually goes wrong. At the beginning, if you are still inexperienced, try to rely on several companies in different industries.
Choose healthy companies and reduce your risk. Can be a help to blind your own opinion TransparentShare.com be. Our app offers an objective evaluation of approx. 500 German stocks based on 12 key figures. You can also simulate stock purchases in our app and gain experience for the first time without having to invest money immediately. To do this, you need to add the stocks you want to buy to the stocks you've bought and just watch what happens. It behaves like a model depot.
Test Transparentshare completely for 14 days free.
- Open a securities account and a clearing account for stock trading.
- Define your investment goals. So determine how much money you want to invest, what risk you want to take and what return you hope to get from your investment.
- Put together your securities account and choose stocks that fit your investment strategy. So, no too speculative values such as the crypto currency.
- Spread your risk and don't put everything on one card.
- Monitor the performance of your stocks.
- Profit from profits and limit losses.