A must-see for stock beginners in 2025! How to operate stocks to avoid pitfalls and make money?

Want to enter the investment market but don’t know where to start? Seeing friends share their investment insights makes you eager, and you want to try with idle funds? Don’t rush to follow the crowd blindly—this article will systematically guide you through the entire process of buying stocks, helping you avoid detours!

4 Essential Risk Avoidance Tips for Beginners Before Buying Stocks

Before officially opening an account to buy stocks, you must grasp the following core points, which relate to whether you can avoid the fate of being a “leek”:

1️⃣ Choosing the right broker is the key to success or failure

Selecting a broker is like choosing a teammate, affecting your investment costs and user experience. When choosing, consider:

• Commission fee structure (Taiwan stocks 0.1425%, US stocks require attention to hidden costs)
• Ease of use of the trading platform (beginners need an intuitive app interface)
• Whether there is a regular fixed investment feature (must-have for small investors)
• Quality of customer service and support hours
• Support for your preferred deposit and withdrawal methods

2️⃣ Do thorough research before making a move

Before buying stocks, you must understand: ✔ Company basic info: industry, main products ✔ Financial status: check EPS, gross profit margin, net profit margin, etc. ✔ Market news: any major news or upcoming earnings calls

Many beginners rush in without doing homework, ending up trapped at high points, losing more than they gain.

3️⃣ Strictly follow discipline

Create a stop-profit and stop-loss plan and execute it thoroughly:

• Set profit targets (e.g., sell half when up 20%)
• Set stop-loss points (cut losses if loss exceeds 10%)
• Don’t change plans impulsively due to emotions

The real reason many retail investors lose money is: they rush to take profits at small gains but cling to losing positions!

4️⃣ Find a trading style that suits you

• Short-term day trading: suitable for those who can monitor the market daily
• Dividend investing: suitable for working professionals, regular fixed investments for the long term
• Swing trading: combine technical analysis to find buy and sell points

How to open an account and place orders? Three steps to get it done

Step 1: Choose the right market

Taiwan stocks vs. US stocks, which should you choose?

Features of Taiwan stocks: ✅ Advantages: familiar with local companies, stricter regulation ❌ Disadvantages: smaller market size, lower liquidity, corporate governance still needs improvement

Investment costs for Taiwan stocks:

• Commission: 0.1425% of transaction amount
• Securities transaction tax: 0.3% on sell
• ETF internal fees: about 0.4%–1%

Features of US stocks: ✅ Advantages: rich investment options, strict regulation, transparent information ✅ Advantages: can buy fractional shares, low commissions, no securities transaction tax ❌ Disadvantages: time zone differences, currency risk, requires time to research US companies

US stock investment costs:

• Custodian fee: 0.25%–1%
• Overseas broker fee: 0%–0.1%
• Hidden costs: remittance fees, exchange rate spreads

Step 2: Prepare to open an account

Offline account opening process (traditional):

1. Choose a trusted broker
2. Prepare ID documents and seal/stamp
3. Visit the branch to fill out an application form
4. Sign the contract, account opened

Online account opening process (modern):

1. Visit broker’s website or app
2. Fill in personal information
3. Upload identity verification documents
4. Sign electronic contract
5. Complete account opening

Most brokers now offer online account opening, saving the hassle of going out, and it can be done in 5–10 minutes.

Step 3: Place orders and trade

For example, placing a US stock order:

1. Log in to the trading platform
2. Use the search function to enter the stock ticker (e.g., “AAPL” for Apple, “TSLA” for Tesla)
3. Choose buy or sell
4. Enter the number of shares
5. Confirm and submit the order

The Taiwan stock order process is similar, just input the Taiwan stock code.

What are the ways to buy stocks? Three major investment tools comparison

Method 1: Direct stock purchase

Suitable for: Investors who have time to research individual stocks and like to grasp details

Advantages:

• High liquidity, can buy or sell anytime
• Receive dividends
• Transparent information, strict regulation

Disadvantages:

• Requires time to select and research stocks
• Risk concentrated in a few companies
• Higher transaction costs

Method 2: Investing in ETFs

Suitable for: Lazy investors with limited time who want diversification

Investment costs:

• Management fee: 0.03%–0.2%
• Trading fee: same as stocks
• Internal fees: already included in ETF net asset value

Advantages:

• One ETF holds multiple companies, automatically diversifies risk
• No need to pick stocks manually
• Suitable for fixed regular long-term investments

Disadvantages:

• Returns are steady but unlikely to surge dramatically
• Not suitable for frequent short-term trading
• Cannot flexibly adjust holdings

Beginner tip: Start with broad-market ETFs, such as S&P 500 or global market ETFs.

Method 3: CFD contracts for difference

Suitable for: Investors with limited capital seeking quick gains from price movements

Features:

• Use leverage to amplify gains (only pay part of the margin)
• Can go long or short (profit from both rising and falling prices)
• Supports multiple markets (stocks, forex, commodities, etc.)
• 24-hour trading, no after-hours restrictions

Leverage example:

• 1x leverage: pay full margin (e.g., $1,671)
• 2x leverage: pay half ($836)
• 10x leverage: pay 1/10 ($167)

Advantages:

• Low minimum deposit, start with a few hundred dollars
• High capital efficiency
• Flexible trading hours

Disadvantages:

• Leverage magnifies losses, stop-loss needed to prevent big losses
• No dividends received
• Choose platforms carefully, ensure they are regulated and reputable

Important reminder: Leverage is a double-edged sword. Beginners must practice with demo accounts first and avoid rushing into real trading with real money!

Basic knowledge every stock investor should know

Stock codes and market indices

Each stock has a unique code for easy lookup and trading.

Taiwan stocks: 4-digit numbers (e.g., 2330 TSMC, 2454 Qisda) US stocks: Alphabetic letters (e.g., AAPL Apple, MSFT Microsoft, TSLA Tesla) Hong Kong stocks: 4-digit numbers

Major indices:

• Taiwan: Weighted Index
• US: S&P 500, NASDAQ, Dow Jones
• These indices represent overall market performance

Trading hours overview

Taiwan stock trading hours: Monday–Friday 9:00–13:30 (no lunch break)

US stock trading hours:

• Regular trading: Monday–Friday 21:30–4:00 Taiwan time
• Pre-market trading: before opening
• After-hours trading: after closing

Note: US pre-market and after-hours volume is lower, prices may be more volatile.

Differences in trading units

Taiwan stocks: Minimum 1 share, but usually traded in lots of 1,000 shares (one lot), also available as odd lots US stocks: Minimum 1 share, no “lot” concept, easy for small investors Hong Kong stocks: Minimum 1 lot, but lot size varies per stock, e.g., 20 or 100 shares

How to monitor stocks? Recommended free tools

Many free tools are available online, such as TradingView free version, Investing.com, local trading software, etc. Beginners can easily get started.

How to read stock prices?

Stock price is the number jumping on the trading software, representing the real-time price per share. Basic concepts to grasp:

• Opening price: first transaction price today
• Closing price: last transaction price yesterday
• Current price: current transaction price
• High/Low: price range today

Tips for monitoring

• Current price is usually displayed prominently in large font
• During trading hours, you can see real-time price movements
• Trend charts help quickly judge stock rise or fall
• Hover over specific dates to see full data for that day

Advanced technical indicators (learn for better profits)

Experienced traders can learn:

• Candlestick charts: show stock trend and momentum
• Moving averages: identify trend direction
• MACD: find buy and sell signals
• Volume analysis: gauge institutional activity
• Financial statement analysis: evaluate company fundamentals

Advice for beginners: start by familiarizing with basic prices, then gradually learn advanced techniques.

Stock picking tips: four steps to get started easily

Step 1: Start with familiar industries

“Buy stocks you understand!”

• If you often buy 3C products, focus on semiconductor stocks
• Love bubble tea? Research food and beverage stocks
• Ride the bus often? Consider transportation stocks

Familiar industries make it easier to judge quality, avoiding guesswork and impulsive buying.

Step 2: Prioritize large companies

Choose large-cap, well-known leading companies, such as:

• Taiwan stocks: TSMC, Hon Hai, Formosa Plastics
• US stocks: Apple, Microsoft, Google, Amazon

Big companies are relatively stable, less prone to hype, and carry lower risk.

Step 3: Assess reasonable prices

• P/E ratio: stock price ÷ earnings per share; lower is cheaper
• Dividend yield: annual dividend ÷ stock price; higher is better
• Compare with industry peers: look at valuation of other companies in the same industry

Step 4: Diversify across different types

“Don’t put all eggs in one basket!”

• Growth stocks: aim for capital appreciation
• Dividend stocks: seek stable dividends
• Mix different industries: reduce risk

Common mistakes beginners make when buying stocks

1️⃣ Ignoring the long-term impact of transaction fees Fees may seem small per trade, but over time they can significantly eat into profits. Always compare fee structures among brokers.

2️⃣ Jumping in without research Placing orders without knowing what the company does? Very risky. It’s recommended to check basic info, financial health, and market news first.

3️⃣ Letting emotions control decisions Following others’ gains impulsively or panicking and selling during short-term losses? Investing requires rationality and discipline.

4️⃣ Ignoring risk management Trading without setting stop-loss or take-profit levels often results in big losses.

Start your stock investment journey

Beginner’s three-step plan

Step 1: Open a demo account Practice with virtual funds for 3 months to get familiar with platform operations and market rhythm, risk-free.

Step 2: Small real trades Start with small amounts, keep trading logs, record entry/exit points and insights.

Step 3: Gradually increase scale Build experience and confidence, then increase your investment amount step by step.

Quick start in three steps

1. Register and open an account → Fill in info and submit application, most platforms do online
2. Deposit funds → Transfer money via various methods quickly
3. Start trading → Search for stocks, place orders, execute trades

Final reminder: Investing involves risks. Carefully assess your risk tolerance. Always remember—choose compliant trading platforms, execute disciplined trading, and keep learning market knowledge. These are the keys to long-term profits. Wishing you successful investing!