How do I invest in the stock market? A complete guide to trading shares

Currency trading

When you think of investing and trading, there's a good chance that stocks (or shares) and the stock market are what first comes to mind. But how and why invest in stocks? Learn the fundamentals of investing in stocks, including the approaches and skills you'll need to invest and trade with confidence.

A share is like a small part of a business. You only need to own 1 stock to claim ownership and claim a portion of the company's assets and profits. In general, stocks form the basis of most portfolios and have historically outperformed other investment types over the long term. There are many ways to participate in the stock market, but two basic approaches can be distinguished: "buy and hold" or short-term speculation.

The "buy and hold" approach is for investors who are more comfortable with a long-term approach. They do basic research into a company's past and present earnings, examine the outlook for their industry, and read expert reviews on the stock. The goal is to find and invest in quality stocks that will provide a long-term return or dividend. The investor who buys and holds stocks is therefore less concerned with the daily improvement in prices.

The short-term speculator, or trader, focuses more on intraday or daily fluctuations in the price of a stock. He often takes a more technical approach, looking at charts and statistics that can give a glimpse of where the share is heading. The goal is to buy cheap and sell for more to make a quick profit. He can also participate in the "short sale" of a stock, which allows him to sell a stock that he doesn't actually own. This strategy is used when a trader believes that the price of a stock will fall, allowing him to profit from a sinking market. Short selling a stock can result in unlimited theoretical risk if the stock's value increases in the market.

These two general approaches are just a basic sample of how stocks can be used either as a long-term investment or as a short-term speculative tool. How you decide to trade stocks should only depend on your goals and your tolerance for risk.

Below are a series of articles on stock market trading that will help you understand the basics of stock investing.

Recommended stock broker

Account typeStock trading account, margin account (79% of CFD accounts lose money)
Management by mandateNo
Stock brokerage feesNo commissions for a min. monthly volume of €100,000 EUR, otherwise 0,20%.
Demo accountYes
Our opinionTrading without commissions, but with a very limited choice of 2,000 shares and 16 ETFs.
Broker reviewXTB
Investing carries risks of loss


Stock brokers

Choosing a broker

How should I choose my stock broker?

Choosing a stock broker is more complicated than it looks. The right stock broker can open up investment opportunities for you, but the wrong one can limit your options and drive up your costs.

Stock market protection

Compensation systems for stock market investors

The protection of stock market investors from their stock broker's bankruptcy and the compensation regimes in various countries.

How the stock markets work

How stock markets are organised

How the stock markets are organised

Initial public offerings (IPOs) on the primary market, transactions on the secondary market, private placements and repurchase of the shares of a listed company.

stock market indices

The main stock market indices: how they work

A stock index or index fund is a collection of individual stocks that helps investors monitor the economic health of a market or sector.

stock market for beginners

Understanding how the stock market works: a guide for beginners

Basic knowledge of how the stock market works can be an important advantage. So here is a concise guide for for you to get started in stock market investing.

Market capitalisation

What is a company's market capitalisation?

Market capitalisation can be a useful tool to measure the risk of investing in a company's stock.


What is a stock dividend and a stock yield

The dividend is a portion of the profits that a company shares with its shareholders. The yield is the ratio of the amount of the dividend divided by the stock's price.

Stock market crashes

The biggest stock market crashes in history

Stock market crashes are just a temporary change in the long upward trend of the world's stock markets. And for traders, they can be synonymous with great buying opportunities.


The NYSE (New York Stock Exchange)

The New York Stock Exchange is the world's largest stock exchange in terms of total trading volume and has an average of 254 trading days per year.

Types of stock market investments

Types of brokers

Trading stock market shares

Learn how to trade stocks on the stock exchange. An introduction for traders and investors who want to know how the online stock market works.

Trading index CFDs

Trading index CFDs

Trading index CFDs allows you to speculate on the performance of a stock markets or an industry as a whole.

Stock market crashes

What stock market investing style is right for you?

Whether you should use an active or passive stock investment style - it starts with an honest assessment of your risk tolerance.

Strategies to invest in the stock market

Analysing stocks

How do I analyse stock market shares?

A basic stock analysis helps you identify the best investment opportunities. Here are four measures of a company's valuation to help you analyse a stock.

Day trading the stock market

How can I identify the best stocks for day trading?

How to choose the best stocks in the market for day trading strategies.

Forex swap

What are the different types of stocks that are traded?

Here's a summary of the most common types of stock investments: Blue Chip stocks, tech stocks, cyclical stocks, speculative stocks, and defensive stocks.

Forex swap

Should I invest in cyclical or defensive stocks?

Defensive stocks are refuge assets that are not significantly influenced by economic conditions, unlike cyclical stocks which are correlated with economic cycles.

Investing when the stock market declines

How to invest when the market is declining

Declining markets are good news for skilled traders and investors. Keep these 6 things in mind when the stock market is going down.

Hedging stock risk

11 ways to hedge stock risk

Whether you trade individual stocks, stock market indexes, gold, or have other investments, there are are various tools you can use to hedge your risk in order to reduce potential losses.