In order to buy stocks, whether online or with an advisor, an investor needs to know the company name and stock symbol (either a few letters or numbers), the price wanting to buy at (bid price), the number of shares, and type of order. Stocks transactions settle three business days after the execution in most jurisdictions, and money will have to be in the account to cover the purchase.
This type of order executes at the current bid/ask.
These can be a Good Til Cancelled (GTC) order, Day Order or All or None Order. The term limit indicates that the order will only be executed at the specified price, unlike a market order that will be executed at the market price.
This type of order will stay open until filled at the specified price unless it expires or is cancelled.
This type of order will only stay in the bid or ask list at the specified price for the day it was entered.
Sometimes referred to as Fill or Kill Order, this type of order will only execute if all the requested stock can be acquired or sold. Limit orders can be partially filled (not all is bought or sold at the price and may require a second commission), but All or None Orders cannot.
A Stop Buy Order will only execute a buy at or above a certain price (the limit price) or where a Stop Loss Order will execute a sell at or below a certain price. A Stop Buy can be used as a risk management tool for a short position, or when using a strategy based on break outs above a technical resistance level. Stop Loss Orders can be used as a risk management tool on long positions locking in a maximum loss in case of being wrong and in some jurisdictions to enter a short position when a stock breaks through a technical support level.
There are different strategies investors use to determine when and how to buy stocks. There are value investors who buy a stock when it is selling at less than its intrinsic value. There are day traders who buy stocks based on their own system, and swing traders who buy breaks and trade momentum. And, there are swing traders who buy breakouts and trade momentum as well as other stocks. Each investor will choose the method in which to buy stocks (online or with a broker) that they prefer most.