Trading FAQs: Getting Started
How much money do I need to get started?
There's no one magic number for how much you need to start investing, or how much you should add each month, because the right number varies depending on your income, budget, and what other financial priorities you're juggling. You may want to consider starting small. In fact, if you're interested in buying stocks or ETFs at Fidelity, you can invest in fractional shares with as little as $1.
How do I get started trading?
Follow these five steps:
Step 1: Create a game plan: Decide how much money you want to invest and when you’ll need that money.
Step 2: Research the investment: Always do your homework and make decisions based on those learnings.
Step 3: Prepare to buy: Determine the price you want to pay, when you plan on buying it, and for how long you want to hold before considering selling.
Step 4: Place your trade: Before you pull the trigger, make sure you’re familiar with the two main order types, market and limit orders.
Step 5: Keep tabs on your portfolio: Once you own the stock, watch for things that may impact its value like news, events, or a company’s earnings report. You can do this by using Fidelity’s tools like price alerts and watchlists.
What are different ways I can invest?
Stocks are probably what you hear about most often when people talk about the "market." They allow you to invest in a company and each piece of ownership is known as a "share". Each share is worth a certain dollar amount that changes throughout the day as stocks are bought or sold in real time on stock exchanges. In addition, you can also buy a "fractional share" or a small slice of a company's stock rather than the whole share. This can make it easier to start investing since the stock for some companies can trade for hundreds or even thousands of dollars per share.
Think of mutual funds as an investment stew. Investments, such as stocks, bonds, and other ingredients are mixed together (some funds may invest only in stocks, or only in bonds) and sold as 1 dish, creating a mutual fund. They offer a way to buy different investments packaged together, or served together like a "dish," and sold together as 1 entity instead of as individual companies. Investments in mutual funds change all the time, as they are managed by a team of professionals who decide which investments to buy and sell. They often come with additional fees (some low, some high) that stocks don’t have because professional managers are making the investment selections. The price of a mutual fund is updated at the end of each business day. You can find out more about each fund's objective and strategies in its prospectus.
ETFs (exchange-traded funds) are another sort of investment stew that mixes together stocks and/or bonds, and sells them for 1 price. They often try to mimic a major stock index, like the S&P 500®, which represents the 500 largest companies in the United States. Since you can't buy from the S&P 500® directly, and may not want to buy stock in each individual company, you can buy one ETF "unit" or "share" and invest in all these companies at once, trading real-time like stocks. And since ETFs contain a mix of assets, they can be a great way to diversify your portfolio and potentially lower your risk and exposure.
How do I research what to invest in?
Here are three great ways to research investments using the Fidelity app and website:
A chart represents how the stock’s price has changed over a set period of time. It also lets you focus on both short- and long-term timeframes while also displaying different trend, performance and volatility profiles. This will help you gain perspective on where a stock’s price has been and where it might be going.
The analyst rating gives you the combined opinions of multiple third-party analysts in a single rating, showing you how analysts are feeling about a particular stock. But keep in mind that not all stocks have a rating, and the score will often change as analysts adjust their outlooks.
Looking at the company profile before buying an investment helps you consider qualities that aren't simply measured by a number, like what the company does, how they make their money, and so on.
How do I place a trade?
If you're trading on the app, start here:
Step 1: Search for a stock or ETF
Step 2: Tap buy or sell
Step 3: Choose an order type
Step 4: Type in a dollar amount and tap review
Step 5: Slide to trade
Watch full video
If you're trading on a computer, start here:
Step 1: Search for a stock or ETF
Step 2: Select buy or sell
Step 3: Choose dollars or shares and enter an amount
Step 4: Choose an order type
Step 5: Select "Preview Order" then "Place Order"Watch full video
Build your investment knowledge with this collection of training videos, articles, and expert opinions.