A Beginner's Guide to U.S. Stocks: Master U.S. Stock Investment Strategies from Scratch

The US stock market, as the most mature and active stock trading market globally, attracts investors from around the world every day. However, for beginners preparing to enter this market, questions about trading rules, account selection, and investment methods can often be confusing. This article will systematically answer how to step into the US stock market and how to choose the investment strategy that suits you.

Why invest in US stocks?

Before diving into operational details, let’s first look at why US stocks are worth paying attention to.

Significant trading cost advantages

Compared to other global stock markets, US stocks have a major advantage in trading costs. There are no lot size restrictions; trading can be done with as little as 1 share. For example, Tesla’s stock price is about $260 per share, so investors can start trading with just $260, without a large capital threshold. In contrast, Malaysian stocks require a minimum purchase of 100 shares, Taiwanese stocks 1,000 shares, Hong Kong stocks typically 100-1,000 shares, and A-shares 100 shares. This means US stocks are more friendly to small investors.

Wide selection and strong liquidity

The US stock market has over 8,000 stocks, including many top global companies like Alibaba, JD.com, and TSMC. As the world’s most liquid financial market, the US averages over 10 billion shares traded daily, making market manipulation highly unlikely. Additionally, NASDAQ hosts tech giants like Apple, Amazon, Google, Nvidia, and many promising startups, providing investors with abundant choices.

Robust economic fundamentals

The US is the world’s largest economy, with a large population and high market activity. Corporate operations are generally stable, providing a solid economic foundation for US stocks. Compared to some emerging markets, the uncertainty is lower.

Basic rules of US stock trading you need to know

Before investing officially, understanding the trading rules of US stocks is crucial.

Main exchanges and trading hours

US stocks are mainly traded on the New York Stock Exchange (NYSE), NASDAQ, and American Stock Exchange (AMEX).

Standard trading hours are from 9:30 to 16:00 Eastern Time (ET) Monday to Friday during daylight saving time, and 10:30 to 17:00 during standard time. Note that investors in different regions need to consider time zone differences. Additionally, US stocks offer pre-market trading (4:00-9:30 during daylight saving time, 5:00-10:30 during standard time) and after-hours trading (16:00-20:00 during daylight saving time, 17:00-21:00 during standard time).

Core trading mechanisms

US stocks adopt a T+0 trading system, meaning you can buy and sell on the same day, providing flexible trading options. The trading currency is USD, with a minimum trading unit of 1 share. Unlike A-shares, US stocks have no daily price limit but have circuit breakers to prevent excessive market volatility. Settlement for sales takes T+2 days, and transaction fees vary by trading method—manual trading about 1%, electronic trading 0.5%-1%.

Choosing the right account type makes a big difference in investment results

US stock accounts are mainly divided into three types, and the choice depends on your investment style and capital size.

Cash account: The most conservative choice

A cash account is the most basic account type, usually requiring around $500 to open. This type can only trade stocks and ETFs and does not allow short selling. Stocks can be traded T+0, but settlement is T+3. If you prefer stable investing with less capital, a cash account is a good entry point.

Margin account: Leverage tool

A margin account allows investors to borrow money from the broker for leveraged trading, with a typical minimum opening balance of over $2,000. It supports T+0 trading, allows both long and short positions, and includes stocks and ETFs as trading assets. The biggest advantage is leveraging to amplify gains, but risks also increase accordingly.

CFD (Contract for Difference): Flexible but high risk

CFD is a financial derivative instrument that has attracted many short-term traders due to its low threshold and high leverage features. Advantages include: minimum trade size of 0.01 lot, margin requirements of only $50-$100; support for leveraged trading; bidirectional trading (long and short); and the ability to trade multiple assets such as US stocks, forex, gold, indices, and cryptocurrencies within one account.

However, leverage’s double-edged nature cannot be ignored—while it amplifies gains, it also multiplies risks. Improper operations can lead to quick small-capital losses.

Three paths to investing in US stocks

Depending on investment goals and risk preferences, beginners can choose from three different investment methods.

Method 1: Direct purchase of stocks

Buying actual US stocks directly is the most straightforward investment method. Investors own shares of listed companies and profit from stock price appreciation and dividends. Advantages include: ability to buy and sell on the same day under T+0, high liquidity; very low transaction costs—only broker commissions, no other fees; capital gains are usually tax-free (but dividends are subject to 30% withholding tax).

Disadvantages include significant time zone differences, requiring late-night monitoring for short-term trading; opening a real account involves more complex procedures.

Taiwan investors can invest via a repurchase agreement; Malaysian investors can trade through local brokers with fees ranging from $3.80 to $25; mainland Chinese users can trade through online brokers.

Method 2: Investing in ETFs for risk diversification

Exchange-Traded Funds (ETFs) are funds traded directly on exchanges, offering a wide variety in the US market, such as tech ETFs, healthcare ETFs, gold ETFs, etc.

The core advantage of ETF investing is risk diversification—no need to worry about the risk of individual stocks; very low costs—management fees are usually around 0.04%, much lower than other markets; easy management—no need to spend a lot of time selecting stocks.

Disadvantages include potential differences within the same sector ETFs, requiring careful selection; spread risk, especially within the first half-hour after market open. Many professional platforms now offer commission-free ETF trading, reducing investment costs.

Method 3: CFD trading for high returns

CFD essentially involves trading based on US stock price movements without owning the stocks themselves, earning from price fluctuations. Its appeal lies in: higher leverage, requiring only a margin deposit; T+0 mechanism allowing both long and short positions, suitable for short-term traders; many trading opportunities, as any asset with price movement can be traded; diversified accounts supporting US stocks, forex, commodities, etc.

But the disadvantages are also prominent: leverage greatly amplifies risks, requiring strict risk management; investors must have a clear understanding of their risk tolerance. Most professional CFD platforms support mobile and web versions, enabling quick registration and demo trading.

US stocks worth paying attention to

For beginners, choosing companies with good fundamentals and strong long-term growth potential is wise. Here are some US stocks worth noting (for reference only; investment should be based on personal circumstances):

Technology: Apple(AAPL), Nvidia(NVDA), Microsoft(MSFT), Amazon(AMZN), Intel(INTC)

Healthcare: Johnson & Johnson(JNJ)

Consumer: Procter & Gamble(PG), Walmart(WMT), Starbucks(SBUX)

Chinese concept stocks: Alibaba(BABA), JD.com, etc.

Comparison of the three investment methods

As shown in the table, each method has its characteristics. If you have limited funds but want to start trading quickly, CFDs are the lowest threshold option but require strong risk awareness. If you prefer steady accumulation, directly buying quality US stocks or investing in ETFs is more suitable.

Mindset advice for investing in US stocks

Investing in US stocks is not a get-rich-quick game but a process that requires time accumulation and practical experience. Many successful investors have experienced multiple market fluctuations and accumulated rich practical knowledge.

Beginners should not seek quick profits; both theoretical learning and practical operation are essential. Start with small amounts, explore patterns through demo trading, and gradually establish your own investment system. Only then can you navigate the US stock market steadily.

Remember, the most important thing in investing is not making quick money but learning risk management and long-term thinking.