How to Buy Stocks and Sell Shares on the Stock Market

A few readers have emailed me regarding the basics of buying and selling of individual stocks along with the accompanied terminology. Even though I’m not a stock trading pro, I have a good few years experience in buying/selling individual stocks so I feel comfortable explaining the basics.

Here are the steps involved with buying and selling shares/stocks:

1. Sign up with a discount brokerage

I have written a discount brokerage comparison that indicates the various costs involved with each broker. I personally prefer to keep my trading costs as low as possible. Trading, maintenance and foreign exchange (FOREX) fees should be accounted for when evaluating how much a brokerage will cost over time. All the brokers listed in the comparison are insured by CIPF (up to $1 million of the trading account is insured).

2. Fund the Account

To fund the trading account, most discount brokerages allow funding via cheque, account transfer and EFT/bill payment from any online banking account. I personally use EFT as I find it the most convenient. After the account is open and funded, the ability to buy/sell stocks in the supported markets should be now available. Some brokerages, like Interactive Brokers, have access to most major public markets in the world.

3. Getting Quotes

After the account is opened, hopefully you’ve already determined which stocks that you are interested in buying. Before buying however, the most recent trading prices must be determined. To do this, enter into the quoting section of the interface which will display last price, bid, ask and volume.

  • Last price: The last price at which the stock traded.
  • Bid: The current highest price per share that a buyer is willing to pay.
  • Ask: The lowest asking price per share that a share holder is willing to sell for.
  • Volume: The number of shares traded during the day.

4. Start Trading

After getting the real time quote of the potential security to purchase or sell, there will most likely be a “trade” button behind which there will be bunch of form fields to fill in to place an order.

Below is a screen shot of the trading page from my Questrade WebTrader account:

Simply fill in the fields indicated and hit the “preview order” button. That will bring the account to a trade confirmation page to ensure that the correct information was entered.

What do all those fields mean? Glad you asked! I have explained them in the next step.

5. Trading Terminology

If you are anything like me the first time trading, you’ll have no idea what all the form fields mean on the trading page.

Security – This is the stock symbol of the company to be potentially purchased/sold. Some brokerages like Questrade will require an abbreviation of the market after the symbol (ie: RIM.TO). Others, like CIBC Investors Edge, will only require the symbol with the market location chosen afterwards in a drop down box.

Order Type – For basic discount brokerages, there are typically 3 types of orders, Market, Limit and Stop.

  • Market Order: When a BUY market order is placed, the ask price is paid, kinda like the “buy it now” button on eBay. Chances are that the order will get filled immediately but often at a higher price than the “last price”. If a SELL market order is placed, the same happens except the shares are sold at the bid price.
  • Limit Order: A limit order is where the price is specified in which to buy/sell the stock to avoid any surprises. The downside is waiting until a buyer/seller hits the limit price which may or may not happen.
  • Stop: This is a little more advanced where the stop price is set for either buying or selling. For example, a stop loss sell order is set to minimize the loss that a trader is willing to take. When the stop price is reached, a market order is sent out at that price. There are also variations to stops such as stop limit orders and various types of trailing stops. These are out of the scope of this article, but I may get into them another time.

Quantity – The number of shares to purchase/sell.

Price – If a limit order is selected, this is the price at which the stock will be purchased/sold IF the market reaches the limit price.

Duration – This is the duration that the order will remain open if not executed immediately. Day will keep the order open until the end of the trading day and Good Till Canceled (GTC) will remain open until manually canceled.

Preferred ECN – Most of the bank brokerages do not allow ECN to be chosen. Even if they do, I always leave it on auto. Brokerages like Interactive Brokers will charge extra if the Auto/Smart ECN routing isn’t selected.

This concludes the very basics of buying/selling stock with an online stock broker. If you have any questions, or anything to add, please leave them in the comments.

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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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12 years ago

Hi MDJ, Another great post from you. Thank you.

I would like to share my trading tools with you and others, Links below are very helpful if someone wants to start swing trading or day trading, I would recommend that person first read and understand most features of different tools.

For Stock Charts :

Stock Filters based on Technical and Fundamentals :

Option 1 :

Option 2 :

Last on the list, My favourite for Live intraday charts with Technical Indicators, Level II quotes, Time and Sales, alerts, news monitoring – FREE download at:

Hope this information will help a few individuals to be better trader. I have no affiliation with any of above websites. Thank you.

Tax Resource
12 years ago

Simple enough and I am a believer in taking control over your life. But knowing what to buy is just as important as making the purchase itself. It’s like making any purchase, you can’t buy on impulse. There is a lot of junk in the financial markets and throwing your hard earned dollars into those stock is like buying a car simply because it has a cup holder regardless of the price.

I would have added a point between 2 and 3 that covered the all important topic of research.

Just my ten cents.

Dividend Growth Investor
12 years ago

Now that I know how to create a stock account, what stocks should I be buying? :-)
Or should I start with index ETF’s if my account is less thant $15K?

Writer's Coin
12 years ago

Nice primer on getting started. This stuff kind of gets lost in the mix sometimes when people write to beginners. They say, “OK, now go out and buy stocks!” But no one tells them the details. Well done.

12 years ago

Thanks for the basics. I’ve been wanting to test the waters and this post gives me a little more info on how to get started. I’ve been following and researching a few stocks and wondered how hard it would be to take action. I now feel more comfortable logging on to an online discount brokerage.

12 years ago

I’ve done a little research online and have no clue how the stock market works, I did stumble across a site (american) that talked about direct stock purchases from the company to decrease the amount of money your paying a brokerage, can you do this in canada?

12 years ago

There are a number of companies in Canada who offer a share purchase plan. For instance, Fortis Inc offers a share purchase plan to interested parties in Newfoundland and Labrador, as well as PEI, as well as a DRIP and Share purchase plan to shareholders. In the case of Fortis, they will allow one to invest up to $20,000 annually though these programs in addittion to any dividends reinvested.


12 years ago

People interested in DRIP investing might start at the website
It’s a nice primer on the subject with many links to other pages.

11 years ago

can i show my stock loss during the year 2008 as a my bussiness loss in year 2008 tax year. i am really confused about it

Compare UK Share Brokers
11 years ago

Great post but I’d like to highlight that stock trading may be a bit different depending on the country and tax laws. Thus in the UK you can trade stocks through financial spread betting, CFDs and share dealing brokers.
Whereas in the states financial spread betting is not allowed, thus you have to be carefull with choosing your broker and what you want to trade.

11 years ago

Thanks for the buy/sell shares basics.
Concerning “Quantity – the number of shares to buy or sell” — Is there a minimum on the number of shares to buy/sell for each trade? Can I just buy one share?

11 years ago

Hi guys,

Quick question. I had placed a GTC limit trade with Quest, but my price never hit. And the trade is still pending.Does it effect my buying power on other shares as it is accepted by quest. Also would there be any cost in cancelling the trade? I have two pending trade, one for call option and other for stock.


11 years ago


But one thing i wanted to know there is no such information that how much amount i can invest or in other words is there a min. or max. amount for the investment.
As thats my first experience


Investing 101
11 years ago

I like the step by step approach. To paraphrase a famous commercial, “so easy, a caveman could do it” :-)

@ Masood: As a beginner, you should go with the simple technique of investing a set amount at specific intervals (say, every paycheck or every other paycheck). This is known as dollar cost averaging and is very effective as an investment technique. You haven’t asked what to invest in, but again, as a beginner, you should definitely look into index funds.

11 years ago


Would anyone know which symbol i can use to buy gold and silver commodity?



10 years ago

Thanks MDJ for explaining in a short article what has puzzled me for a week! Questrade should pay you to post the article!

Just created my first self-directed account (a TFSA). Very excited, trying to stay rational.

Investor X
10 years ago

I’ve heard that one of the indexes (TSX?) provided a return of 10% over the past 50 years or so. How would that figure have been determined? Does that take dividends paid and reinvested or is it just a stock value without any earnings paid out?

Nancy A Olson
10 years ago

I have canadian stocks with CP Railway. I have the actual stocks in my possession as I lived in Canada and got them as part of an Employee Stock Purchase Plan. Can you tell me how I can sell them? thanks.

10 years ago

I think that the begginer should start off by paper trading first of all. I know this isn’t the same experience as trading for real but will give them a good understanding of the mechanics.

10 years ago

I tried to sell some shares on an online stock brockerage at a limit price. That particular day the price hit my limit price and went beyond. My shares didn’t sell. Why not? Thanks,

9 years ago

Hi everyone,

first time i post here, a very nice site!
I am a canadian investor at IB online broker, with a $US account.

My question is where should I park my cash money to get some revenue? Where can I buy money market funds in $us?

I have not IB permission to buy US bonds non US mutual funds–just ETF, stock and Forex– in that specific account and IB pays 0% interest under 100K$+- .
I am sure there is many more canadians in a like position.

Thanks for you ideas on subject


9 years ago

Hello –

A funny question came up on an investing board and I’d like to check with every one here, since we all use a variety of brokers. It seems that on Stocks both “Stop Loss” and “Stop Limit” orders are possible.

Is anyone able to do this for Options as well? I can do neither for Options at TDWH.

Someone said the TSX only allows Stop Limits.

Thanks in advance for your input.

9 years ago

Can I buy stock online of a US company and then put it in my RRSP? Do I need a self-directed RRSP or can I put it in my spousal plan with Mackenzie that holds only mutual funds now.

9 years ago

With a Scotia iTrade account, is it okay if I buy some stocks, and hold on to them for a year or so? Will I be charged for no trading activity?


9 years ago

how can we sale shares in open market is there any vendor in middle east (saudi arabia) ?

james coffee
8 years ago

How much money do you need to start playing at buying and selling stock . I have a cople of thousand I can use , but don’t know if there is a minimum amount of $ needed or if there is a minimun amount of shares that must be bought from each stock company or a ninimun needed if I buy several stocks .
7 years ago

-2. Get out of debt.
-1. Do a LOT of research on the stock market and trading option.
0. Do EVEN more research.
1. See your excellent list above!!


Anita Maudhoo
6 years ago

Hi I just opened a Questrade RRSP acct and I am beginner trader. I read your article on the DLR/DLR.U strategy and will be using this in my RRSP acct. This strategy suggest putting a limit order on the ask price for DLR.

Would I employ the same strategy when I am ready to purchase my $US stocks? I am not really sure how to buy and at what price I would put my limit at. Is it somewhere between the bid and the ask? If my price is never reached then do I have to keep placing a new order each day?

Any help would appreciated as I know which stocks I would like to buy but not really sure how to complete the transaction.


4 years ago

Hi Guys,
I have a question, I made a trade about two months ago – it seems at the time that the shares in question had done a reverse split – consequently the share price went up. The split was not communicated until two days ago. Anyway to cut a long story short, when the price went up that much I sold. I then used the money to purchase a car. Two months later the bank is approaching me saying there was a split etc. What are the implications here – first off the trade was in USD and CAD, so there are currency implications, then there is the cost of the trade and the transfer to USD. Whose fault is this anyway, I made a trade in good faith, the trade itself took 4 days to settle, and the money was in my account for about 3 weeks after that before I transferred it to my checking account. Am I legally obligated to return the money? or the shares? Thanks in advance,!!

4 years ago

Can you use your RRSP to invest in dividend producing stocks? Or are they only meant for long term investments with no pay out dividends?
Then, can I apply the dividend cash pay down LOC debt?

John McKnight
4 years ago

I liked your recomendation on dividend stocks but you missed essential considerations, BROKERS FEES AND TAX.

Stock issued through a stock broker has a cost. Typically a company issues stock and is paid a discount of at least 7% by the stock broker and then the broker resells the stock to retail investors. It is possible to purchase stock directly from many companies (20% of US listed stocks) directly from the company without giving away the first 7% to brokers. Most companies have pension plans which allow this and you do not have to be an employee to participate. Call the administrator and arrange the account. Try Computershare Direct Stock Purchase 1-800-438-6278 as one organization which administrates pension plans for some listed companies.
NET AFTER TAX. The best type of account to hold dividend stocks in is a tax advantaged type of account such as a tax free or RRSP.

3 years ago

Hello FT,
just like the other one I read so far, another great article. I think the difference with the way you write is that you are not a professional, and for this reason, you only use words and expressions that most of the people will understand.
My question is this: living in Canada, what types of Questrade accounts would make sense for me? Questrade offers different types of accounts such as Margins, TFSA, RRSP, RESP, etc. why should I choose one and not the other? What are the advantages of having one and not the other? I know what each acronym means, but when it comes to trading/investing, which one should I pick?
I currently have a margin account at Questrade. I can’t tell why I picked that one for the first account. After reading on your site, I am in process of opening a second one, this time a TFSA (I used your referral by the way).
Hope I was not too long.
Thanks in advance for your reply and once again thumbs up for this great website.

3 years ago
Reply to  FT

Thanks, FT for the quick reply. I will read and come back if I have some more questions.

3 years ago

Hello FT,
I read your blog every night when I come back from work. I am sure just like my previous question, you’ve probably answered this one as well. With an initial investment of $6000CAD, how would you start on the stock market? Is it smart to take advantage of the margin that Questrade gives us to trade with? If yes how would you use that margin?
My plan was to use the 6000 plus half of the margin to do covered calls as well as buy some dividends’ paying stocks and use those two strategies to grow my capital on top of monthly savings. In order to minimize the risk, my plan is to only buy stocks that have had rising trend in the last 5 years.
I fully understand that you are not a professional and that we’re just sharing opinions but I can’t wait to read your answer as well as those from experienced traders and investor.