How to trade stocks

Start with what you know

A good way to start thinking about potential stocks is to consider the companies and brands you use every day. There are a number of resources and tools available at E*TRADE that may help guide your decisions about investing in companies that you are interested in.

• Market news. Events reported in the news about a company may offer signals about how its stock will perform. The launch of a new product might be a sign that a stock's price will rise, for example. Bad news, on the other hand, might mean that the price will drop.
• Sector information. How does the price of a particular company's stock compare to the stock of other companies in the same type of business, or sector (e.g., technology or energy)? If the price of your first stock is overvalued or outside your target range, there may be other opportunities to invest in similar companies that have more attractive evaluations.
• Watch lists. Following the price and performance of a stock over time may help you form an opinion about buying the stock and what price you think it's worth. Watch lists make it easy, and you can set them up with just a few clicks.

E*TRADE has more choices for you when placing a trade than just the below options. Here we show you some of the more common selections.

Select a Price Type:

1. Market: Choose this type to buy or sell a security such as a stock that will be executed immediately at the best price currently available on the market. Market on close is another option, but is less common
2. Limit: A Limit order buys a stock at (or below) a specific price you target, or sells a stock at (or above) a price you target--and it only executes if you get your price or better.
3. Stop: You can sell a security such as a stock if its price falls past a specified point, used to limit (i.e. “stop”) losses or lock in profits. (Buy stop orders also exist but are less common.)

Choose a Duration:

1. Good for Day: Specifies an order that will remain in effect for one day, or until it is fully executed or cancelled.
   
2. All-or-None: Select this to enter an order that must buy or sell the full quantity of shares that you specified in a single transaction, or it won't execute at all.