Can anyone explain to me how to be part of the stock market?

There is no way that you should consider buying stock if your understanding of the market is such that you look for advice here. There are many books and courses available that explain the stock market, day trading etc.. Spend a LOT of time with them before proceeding. It is a very volatile and unpredictable market now where even the world’s best traders are declaring trading losses.

@DarkScribe—thank you for your concern. im just only thinking ahead of what to do with my money. i only need to know what my options are. however i still need to know how to participate in the stock market, even if i don’t buy some stocks.

If I had money to invest, I’d contact a stock broker.

I work a trade desk and have been on many sides of securities transactions and now is the time to buy in most people’s opinions. Even people that are not familiar with it at all should buy “defensive” stocks if they are unfamiliar on how to do the research. These are stocks that don’t fluctuate as drastically with the state of the economy. Things like utilities, food, tobacco, alcohol, energy – these are things that people will not give up in a bad economy, especially utilities, energy, and food since we need those to live. So I’d disagree with that first comment, but do exercise caution.

Ways to buy stock:

1) On your own: go to a website like sharebuilder.com, ameritrade.com, etrade.com, zecco.com (low fees at this one) and create an account. These would be considered online, self managed brokerage accounts because you’re managing it yourself. After you create an account, the most common types are Individual, Retirement (IRA, Roth IRAs….), Joint (multiple owners), UTMAs/UGMAs (for children…), you’ll usually have to fund it somehow to make a purchase. Every web site is different, but most will let you set up electronic fund transfers (EFT) so you can send money from your bank account right into your brokerage account. You can also send in a check, but that process slows down the transaction. Most EFTs take 1–2 days to get money in the account. Once the money goes from bank to brokerage account, it will be held at the brokerage account in a “money market fund.” This is a place where the money will stay and usually earn .005 – 2% interest until you use it to buy stock or other investments offered.

Most of these sites will have a “trade” tab or button or something like that, when you click on it, it’ll take you through a general process and ask you what kind of order (most common are market order and limit orders, but there are probably about 10 different types), what stock ticker, how many shares, etc…. Eventually you’ll click execute the trade or submit or something like that and the web site will electronically send your order through their clearing house to the trading floor where your order will be executed and then post back into your brokerage account – takes seconds in most cases and there are techinals here, but that’s the basic way it works. Most of the online brokerages will charge you from $5 – $10 per stock trade and will have surcharges if you do a huge volume of shares – read the fine print.

*Note, if you choose this method, most online sites will offer telephone assistance for free, but will charge you $20+ for an assisted trade

**Do NOT trade on margin if this is your first experience trading – margin accounts are very tricky for someone not familiar with it. During account creation, they’ll ask you if you want to create a cash account or a margin account in some way. Be sure to click cash – that just means you can only buy stock with money you have.

2) Through a stock broker/independant financial advisor: The stock broker or advisor will have you fill out what’s usually called a “suitability” to gauge your risk tolerance, investment objectives, financial data, etc…. and then set up an account for you through whoever does their trading for them. After they have the account set up, you just call them and say you want to buy this stock, etc…. and they’ll take care of it from there. Doing it this way though is far more expensive since the broker could charge you $0 to $60 for one trade. The added benefit is, they will often advise you on your investments and sometimes that’s how they justify the high commission.

You may want to go down to your local financial advisor’s office and just tell them your situation – be cautious though and don’t give up your money so easily. Advisors in this market are starved and many will go out of their way to get your business.

There are tons of other things, but I’d like to avoid writing any more than this hah. A book I would suggest is “The Intelligent Investor” by Benjamin Grahm. He was a key influence in Warren Buffets life and the basic principles in that book are super valuable for beginners and experts alike.

Feel free to ask any questions – I’m full of good info and I like to regurgitate it so I understand it better – just leave a private comment and I’ll get back to you.

With your obvious lack of knowledge of the markets (not meant as an insult) the best way for you to gain exposure to the markets would be via an equity fund such as an OEIC. This is where your money is pooled with that of other investors and then an experienced fund manager or managers backed by a research team invest in the markets on your behalf. It spreads the risk over many stocks and leaves the individual stock picking decisions upto the experts and not the amateurs.

Read this layman’s guide to investing, it’s called the Motley Fool

I would add two items to @Urban‘s excellent answer.
1) Set up a folder in a file drawer or on your pc the day you open an account and keep records of all your transactions. You will need to enter the buy and sell information on your income tax form Schedule D Capital Gains and Losses. You’ll need the purchase and sale dates, total sale and total purchase price. Any tax software will do this for you but you need the information first.
2) The market is a crap shoot, unless you have inside information, and that is illegal. Don’t invest more than you are willing to lose or can afford to not touch for a while.
I’m sticking my neck out here but this does seem like a good time to get in. Good Luck.

Start small. Think small. Don’t get greedy. Day trading is gambling, and you’ll do better at the racetrack.

And if you want to get a feel for it, try a stock market game first. You get something like $10,000 in play money, and you get to invest it. It will give you a sense of how the market works, and you can learn how to evaluate companies and stocks.

1 more thing to add to Urban’s response: BUY LOW SELL HIGH

Re: @cwilbur with what this member said – try the virtualstockexchange.com – they have contests where you get play money and compete with others to win actual prizes, small cash prizes to paid vacations. they simulate real trading conditions with a few exceptions. it helps to take things more seriously if there is something tangible to gain since it’s hard to appreciate knowledge sometimes right? ^_^

There’s an old adage: “Every man has a system – that’s doesn’t work.”
Any rule you figure out for yesterday’s data will not always be applicable for today’s.
Use play money first.

thanks to everyone for your advice! especially to urban!

@Urban and @cwilbur do you know any stock market game website that i could try? i tried virtualstockexchange.com, and registered, but internet explorer cannot open the site.

The virtual stock market game is actually available as a game on the App Store!

Put in a job application for some job that they have there. Don’t hold your breath.

A good virtual stock site is www.weseed.com

Sure. Have lots of money that you are willing to have someone lose for you.

Incorporate and sell your stock on Craig’s list.

HAHA, GET A NICE SHIRT AND GET READY TO LOSE IT !

There are ways for an investor to make enormous profits, but as ever, they involve enormous risks. Things like day trading or options and futures really are NOT for the beginner with limited resources. They are highly technical, involve the potential to lose all of your investment quickly and need constant monitoring. I know that I am quite traditional in this sense, but many options appear to me as if they are little more than a gamble. That is not how a prudent investor operates! Instead look for reliable and predictable companies, quoted on the stock exchange and suitable for beginners.