One of the most affordable and user-friendly ways to start making money in the stock market is through buying stocks online. But If you’re investing for the first time, you’ll need to know a few things before getting started.

While choosing the most lucrative stocks in an unpredictable market is not always an easy task, here are a few tips to help you succeed in the world of e-trading.

CHOOSING A BROKER

Deciding what kind of broker you’d like to invest with largely depends on the type of investor you are. If you’re just beginning, a full-service online broker might be best as they can assist you with your decision-making (though they’re a bit more costly).

If you’ve already got some experience with the market, you may opt for a discount broker, which offers less hands-on support, but gives you complete control over your investment portfolio. This type of investing will require you to do your own research, but there are plenty of free online resources to guide you along the way.

Trading fees at online brokers are typically far lower than their old-school brick-and-mortar counterparts — and e-traders such as Robinhood even offer free stock trading.

STARTING UP

It’s important to recognize that investment is inherently risky. That doesn’t mean, however, there aren’t safer ways of getting a return on your investment. Diversifying is a good strategy. Although investing a large sum into a single stock with the hopes of yielding a large return are enticing, it’s wiser to invest in multiple businesses, and across varying sectors. Market volatility may negatively affect one sector while positive gains appear in another, and a wider scope of investment allows for potential losses in one area to be counteracted by the profits in other areas.

A rule of thumb is to avoid notoriously risky assets, such as “penny stocks.”

Opening an account is a relatively pain-free process. Most e-brokerages guide you through the process in a user-friendly manner. This step typically requires already having the minimum amount of funds required (which varies from broker to broker) in another account — like a checking account — so that you can make the transfer to the brokerage directly. Many online stock brokers offer no-fee sign-ups.

PICKING STOCKS

Host of CNBC’s “Mad Money,” Jim Cramer, recommends maintaining about 10-15 stocks at one time. Keeping a manageable number of stocks allows you to do your homework and stay informed about their potential futures.

MARKET ORDER VS. LIMIT ORDER

Every time a stock is purchased you must decide between a market order and a limit order. A limit order involves buying and selling securities at a specific price. In this way, the purchase is put on-hold until a stock’s price falls to hit the price you’ve set. Market orders, on the other hand, give you control of the price at which you buy a stock, with an online broker purchasing at the next available market price.

FINALIZING

After you’ve researched where you’d like to invest, and set your prices, all that’s left to do is submit your order. We recommend using a mobile app (which most online brokers offer) to then monitor the progress of your investment portfolio.

SOME GOOD ONLINE BROKERAGES

Initially the sheer number of online brokerages can be daunting. It’s best to choose those with a proven track record. You’ll want to find one that suits your investment style, and one that offers the breadth of services with which you’re hoping to engage the market.  

E*Trade offers free analyst research and comprehensive customer support services. Along with promotional rates for first-time investors, they offer a relatively low $6.95 per equity trade.

Interactive Brokers is another popular site, designed for international investing and active traders. Their monthly fee is $10 for accounts exceeding $2,000, and $20 for smaller accounts.

OptionsHouse offers very low rates: $4.95 for stocks and $1.50 for futures. They also boast a highly-rated mobile app that alerts customers to detailed announcements regarding news and insider trades on the companies in their portfolio.

Scottrade offers competitive rates with a particularly beginner-friendly interface, giving users an instructive introduction to stock analysis.

TradeStation is geared more towards experienced investors and is known for their state-of-the-art technology. They offer several pricing options, including a very reasonable $5 fee per transaction.

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