Categories: Info

Part 3 – Accounts, Brokers, and Basic Order Types

Table of Contents

Part 3 – Accounts, Brokers, and Basic Order Types

1. What is a brokerage account?

To buy and sell stocks, you first need a brokerage account.questrade+1
A brokerage account is an investment account at a financial firm that allows you to deposit money and use it to purchase assets like stocks, ETFs, and funds.investor.vanguard+1
You can usually open and manage this account online through a website or mobile app.investing+1

2. Choosing an online broker

There are many online brokers, and for beginners the most important factors are low fees, easy‑to‑use platforms, and solid educational resources.bankrate+1
Well‑known beginner‑friendly brokers in recent reviews include firms such as Fidelity, Charles Schwab, Robinhood, SoFi, and others, though availability depends on your country.nerdwallet+1

When comparing brokers, pay attention to:investing+1

Trading costs (commissions and fees).
Account minimums (the minimum amount of money required to open or maintain the account).
Tools, research, and educational content.
Customer service quality and support channels (chat, phone, email).

Choose a broker that matches your experience level and offers clear information in a language and interface you feel comfortable with.questrade+1

3. How to open and fund your account

Opening a brokerage account is similar to opening a bank account, but the broker will ask more questions about your finances and investment goals.questrade+1
You normally provide personal identification, contact details, and information about your income, net worth, and risk tolerance.investor.vanguard+1
After the account is approved, you link a bank account or use another funding method to transfer money into the brokerage account before you can start buying stocks.fidelity+1

4. Basic order types: market and limit orders

When you actually buy or sell a stock, you place an “order” through your broker’s platform.tastylive+1

The two most important basic order types are:investor.vanguard+1

Market order: An instruction to buy or sell immediately at the best available current price in the market. It usually executes quickly but you do not control the exact price.
Limit order: An instruction to buy or sell at a specific price or better. A buy limit order will only execute at your limit price or lower; a sell limit order will only execute at your limit price or higher.

Beginners often use limit orders when they want more control over the execution price, especially in volatile markets.tastylive+1

5. Protective orders: stop and stop‑limit

A stop order (often called a stop‑loss order when used to sell) becomes active when the stock reaches a chosen “stop” price.investor.vanguard+1
For example, you might place a sell stop order to reduce losses if the price falls below a certain level.tastylive+1

A stop‑limit order combines a stop order and a limit order.investor.vanguard+1
Once the stop price is reached, the order converts into a limit order at your chosen limit price, giving you more control over the actual transaction price but with no guarantee that it will execute.tastylive+1

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