2025 Beginner's Complete Guide to Stock Trading: Learn to Invest from Scratch

The First Step into Stock Trading

Want to learn how to trade stocks but always feel confused? Watching friends share their trading insights, do you also feel eager to try? Don’t worry, this detailed beginner’s guide will walk you through the basics of stock trading step by step, helping you avoid many detours.

How to Choose the Right Trading Platform

To trade stocks, the most important step is selecting a reliable trading platform. This is like finding a good “teammate.” There are many options in the market, from traditional established brokerages to emerging online trading platforms.

Key Factors When Evaluating a Platform:

Cost Considerations Trading fees vary greatly across platforms. Taiwan stocks generally have a commission rate of about 0.1425%, but each broker offers different electronic order discounts. For US stocks, watch out for minimum commission issues; some platforms charge over $10 per trade, which can significantly impact small investors.

Ease of Use of Trading Interface Beginners should prioritize intuitive apps or web platforms. A clean interface design is crucial for quick onboarding. If you often do short-term trading, choose a platform with fast quote speeds and high system stability.

Additional Services Check if the platform offers features like regular investment plans (especially useful for small investors), professional research reports, stock selection tools, etc.

Localization Services If considering overseas platforms, support for Traditional Chinese interfaces makes operation smoother. Having local customer service is also important to avoid time zone issues. Some platforms support TWD deposits and withdrawals, saving currency exchange hassle.

Tip: Before choosing a platform, try applying for a demo account to test the interface. Once comfortable, fund your account.

Investment Options in Taiwan Stocks and US Stocks

Taiwan Stock Investment Guide

Advantages of Taiwan Stocks:

• High familiarity with local companies and industries
• Relatively strict regulation, better risk control

Disadvantages of Taiwan Stocks:

• Smaller market size and lower liquidity compared to international markets
• Some companies still lack transparency and corporate governance standards of large international firms

Ways to Participate in Taiwan Stock Trading and Fees:

Direct Trading via Securities Account

• Commission: 0.1425% of transaction amount
• Securities Transaction Tax: 0.3% on selling

Fund or ETF Investment

• ETF fees: 0.1425%, transaction tax 0.1%, internal deduction fee about 0.4%-1%
• Fund subscription fee: 3% for stocks/1.5% for bonds, annual management fee 0.2%, manager fee 1%-2.5%, custody fee 0.2%

US Stock Investment Guide

Advantages of US Stocks Compared to Taiwan Stocks:

• Diverse investment options, from Apple, Microsoft to Tesla, investing in top global companies
• Many innovative companies (like AI and EV manufacturers) are listed in the US, offering high growth potential
• Lower transaction fees and no securities transaction tax (Taiwan stocks incur 0.3% on sale), more friendly for small investors

Risks of US Stock Investment:

• Limited understanding of US companies may require more research
• Time zone differences (Taiwan evening 21:30 to early morning 4:00) mean late nights if you want to monitor markets
• Currency risk: significant exchange rate fluctuations can offset investment gains

Ways to Participate in US Stock Trading and Fees:

Traditional Stock Trading

Via domestic brokers (agency trading):

• Commission: 0.25%-1%
• Exchange fee: 0.0008%
• Trading activity fee: shares × $0.000145 (minimum $0.07, maximum $7.27)

Directly through overseas brokers:

• Commission: 0%-0.1%
• Exchange fee: 0.0008%
• Trading activity fee: shares × $0.000145 (minimum $0.07, maximum $7.27)

CFD (Contract for Difference) Trading

This method does not require owning actual stocks but profits from price movements. Most CFD platforms support trading US stocks, forex, precious metals, and more within the same account, ideal for building diversified portfolios.

CFD trading costs include:

• Spread (buy/sell difference)
• Overnight financing fees

Main Features of CFDs:

• Leverage trading allows controlling large positions with small capital (e.g., with 1,000 yuan, you might trade as if you had 10,000)
• Supports long and short positions, profiting from both rising and falling markets
• Low entry barrier, starting with a few hundred yuan
• 24-hour market, continuous trading opportunities

But note: leverage is a double-edged sword, amplifying both gains and losses. Without stop-loss settings, risks are high. Beginners should use leverage cautiously.

US Stock ETFs

Buying ETFs via agency or overseas platforms is a good way to diversify risk.

ETF trading fees:

• Management fee: about 0.03%-0.2%
• Trading commissions similar to stocks, often discounted on many platforms

ETFs allow one-time investment to gain exposure to multiple markets, avoiding the hassle of selecting individual stocks, especially suitable for busy professionals using regular investment plans.

Basic Knowledge of Stock Trading

Must-Know Terms

Before trading stocks, familiarize yourself with basic terms like “market order,” “internal/external volume,” etc., so you won’t be confused when placing orders.

Trading Hours Rules

Taiwan Stock Trading Hours Monday to Friday, 9:00 AM to 1:30 PM (no midday break)

US Stock Trading Hours Monday to Friday, Eastern Time 9:30 AM to 4:00 PM (Taiwan time 9:30 PM to 4:00 AM next day), with pre-market and after-hours trading

Differences in Trading Units

• US Stocks: Minimum trading unit is 1 share, very friendly for small investors
• Taiwan Stocks: Usually traded in lots of 1,000 shares, but also available in odd lots (less than 1,000)
• Hong Kong Stocks: Minimum unit is 1 lot, but the number of shares per lot varies (could be 20 or 100 shares)

Basic Skills for Reading the Market

How to Interpret Stock Price Information

Stock prices are constantly changing numbers on trading software, representing the current price per share, fluctuating with market trades. Beginners should master these basic price types:

• Current Price: The latest transaction price
• Closing Price: The last price of the previous trading day
• Opening Price: The first transaction price of the day
• High/Low Price: The highest and lowest prices reached during the day

Free Market Data Tools

Many free tools are available online, such as TradingView, Investing.com, and local platforms like Goodinfo, all free for beginners.

When using these tools, hover over the date to see open, close, high, and low prices for that day.

Advanced Market Analysis Skills

Once experienced, you can gradually learn:

• K-line (candlestick) analysis to identify trends
• Moving averages to determine price direction
• MACD and other technical indicators for buy/sell signals
• Order book analysis to understand market participants
• Financial statement analysis to assess company value

These advanced skills require time to learn. It’s recommended to first master basic price concepts and then deepen your skills gradually.

How Beginners Can Choose Stocks Scientifically

First Step: Start with Industries You Know “Buy stocks you understand” is a timeless rule. Familiar industries make it easier to judge growth prospects. For example, frequent users of a certain brand will have deeper insights into that company’s potential.

Second Step: Focus on Large-Cap Companies Choose stocks of large, well-known companies. These industry leaders tend to be more stable and less prone to wild swings caused by speculation.

Third Step: Reasonable Valuation Use metrics like P/E ratio (price/EPS) or dividend yield to assess whether a stock is fairly valued.

Fourth Step: Diversify Asset Allocation Don’t put all your funds into a single stock. Mix value stocks with growth stocks to hedge against market fluctuations and ensure steady gains.

Common Mistakes Beginners Must Avoid

Be Cautious When Choosing Trading Platforms

Small differences in fees may seem insignificant but can add up over time. Picking a platform is like choosing a teammate; reliability is key. For high trading volumes, negotiate fee discounts.

Do Proper Research Before Investing

Investing blindly without understanding a company’s business is risky. Beginners should:

• Review basic company info (industry, main products)
• Analyze financial health (EPS, gross margin, etc.)
• Follow news and major announcements

Strictly Follow Stop-Loss and Take-Profit Rules

Establish your trading discipline. For example: take profit at 20% gains and sell half, then trail a stop-loss; cut losses at 10%. Many retail investors lose money because they take profits too early and hold onto losers.

Find a Trading Style That Fits You

• Intraday Trading: suitable for those who can monitor markets daily
• Value Investing/Dividend Stocks: suitable for busy professionals seeking stable dividend income
• Swing Trading: combine technical analysis to find key turning points

Most importantly, find a rhythm that makes you comfortable. Don’t blindly follow others’ strategies.

Three Steps to Start Your Stock Trading Journey

Step 1: Open an Account Fill in the necessary information, submit your application, and choose a suitable platform.

Step 2: Deposit Funds Quickly fund your account through various supported methods. Beginners are advised to start small.

Step 3: Begin Trading When you spot a trading opportunity, place an order quickly. It’s recommended to practice with a demo account for the first three months to familiarize yourself with each platform’s operation.

Tips for Beginners

1. Practice thoroughly with a demo account, at least three months, before trading with real money
2. Keep initial investments small within your risk tolerance
3. Record every trade and reflect on lessons learned
4. Don’t expect to get rich quickly; stock trading is a long-term learning and practice process

Remember: stock trading is both investment and learning. Caution, patience, and continuous education are keys to success.