In this post, I’ll share with you the broker I’ve been actively using for my trade activities on the U.S. stock market. This is so that it will be easier for me to communicate with you if I need to cover the technical aspect related to the broker. It will also be beneficial for beginners who are looking for a stock trading broker to settle down with.
I’ve been using Interactive Brokers (IBKR) since I started my journey into Wall St. It has one of the lowest trading commission rates around, and the widest variety of variety of tradable securities including those on foreign exchanges. The one drawback of trading on IBKR’s trading platform, Trading Work Station (TWS), is that it isn’t user-friendly especially for beginners. But it will be fairly easy to use once you become familiar with its interface.
Opening an account
You may visit their website by clicking here to register an account with them. On the top right hand corner, click on “Open Account > Start Application”. Follow the instructions carefully. The application process may be thorough due to regulations that brokers need to follow, so please bear with it. Also, when it comes to the application requesting details about which trading tools you prefer to use, make sure to go with stocks, ETFs, CFD, and Options.
How to use Trading Work Station (TWS) software
Once you’ve registered and gotten your account approved, you may refer to this YouTube tutorial video on how to install and begin using their trading platform, TWS: https://youtu.be/_SbYfTWbWcU
Next, you will need to learn how to place Buy/Sell Orders for a security. For beginners, it’s better to use Limit Order (LMT) when you buy a security, and Stop Order (STP) when you want to sell a security that you own. Please practice to key-in the figures manually when it comes to BOTH the quantity of security and the price target that you prefer to Buy/Sell at. You may learn the basics of that by clicking on this article here.
How I place my Buy/Sell orders
The interface of my TWS may look and feel different than yours due to the version and me setting it on “Classic” mode. But the process of adding a stock and placing a buy/sell order is similar:
Step #1: Add the stock to your TWS
Click on an empty row on the left most column as shown above, then type in the ticker symbol of the stock (eg. ‘sq’ for SQUARE). Next hit the <Enter> key.
A menu will then appear for you to select which type of trading tool you want to trade this stock with (standard, Options, CFD, etc.). If you’re new, you should select Stock.
Step #2: Select a Buy or Sell order
Right click on the ticker symbol of the stock, and a menu will appear. Then click on ‘BUY’ to long a stock or ‘SELL’ to short a stock or close your position if you currently have any.
Next, a row of details related to your Buy/Sell order will appear right below the stock. This will allow you to key in details for your order. Here’s what it consists of:
Quantity: The amount of stocks or contracts (if you’re trading Options) you wish to buy/sell. Manually key in the amount (eg. 5) just to be safe.
Time In Force: Make sure to select ‘GTC’ instead of ‘DAY’. This determines how long your order will last. Choosing ‘DAY’ means your order will last until the end of the trading day. ‘GTC’ stands for Good-Til-Canceled, which means your order will last until it has been filled or if you cancel it.
Type: The type of order you wish to execute. For now, just select ‘LMT’ (Limit Order) if you’re buying the stock or ‘STP’ (Stop Order) if you’re selling your position.
LMT Price: Manually key in the target price (eg. 270.32) you wish to buy the stock at. Note that you may not get it at the exact price BUT you’ll get a price that’s close to your target. This is due to the demand and supply of investors buying and selling the stock.
STP Price: Just like LMT Price, this one is used for Stop Orders, which you should key in manually if you plan to sell your position in the stock.
When you’re done filling up the details for your order, and double-checking it you may click on the ‘Transmit’ button to confirm your order. Until then, if you would like to sell your position in this stock just right-click on the Buy order row and select ‘Sell’. The sell order works the same except you will be selecting a ‘STP’ (Stop Order) instead of ‘LMT’.
If you’ve any questions about the tools/services listed here, feel free that to contact me. I’ll be more than happy to guide you on how to open an account as well as using TWS!