Interest rates have fallen to almost zero, so the use of standard methods of saving and investing has lost a lot of meaning. Of course, we are talking about deposits, which will give us a maximum return of 0.5% at the moment – and this is with good winds. In such a situation, entering the capital market is the only correct option. Many people, despite their desire to start trading on the stock exchange, do not really know how to take their first steps on the trading floor and buy shares. If you are also wondering about it, then this guide is for you.

Using standard methods of investing your capital is a piece of cake. All you have to do is enter your personal account and open a deposit in a few clicks. It is also easy to use investment funds, the offers of which are proposed by bank advisers. We give them the money, and they give us a vision of a great rate of return… In fact, it’s just going to be a small percentage – and in many cases we don’t even have a “start from scratch” guarantee.

It should be noted that these types of funds (TFI, OFE or PPK) are actually investors in the stock exchange. Therefore, it is worth asking yourself whether we need another intermediary between our money and the capital market? After all, we can buy shares ourselves – and it is definitely worth taking advantage of this opportunity.

But after all, playing in the stock market and conducting all these transactions is very difficult … It is not at all – the financial industry sometimes just likes to create the impression of “space for insiders”. With the modern digitization of stock exchange services – buying shares is easier than opening a deposit! You will find out in the following paragraphs.

How to play the stock market? Just buy stock

In this text, we don’t want to focus on general advice related to playing the stock market (although we provide some tips at the end of this guide), but to show you how to buy stocks step by step. If you are interested in other aspects of investing, read our articles:

★ What to invest in 2022?

★ How to invest in bonds? Capacity review

★ Investing in Gold in 2022 – All You Need to Know

★ Ripple – What is it and is it worth investing in XRP?

Now let’s get to work. The first and most important thing is the need to own a brokerage account. There are dozens of brokers available in the market that provide the option of creating an investment account. Some of them are associated with large banks, others are of a non-banking nature. To choose the right brokerage firm, you can use our brokerage account classification.

The offered financial instruments, especially those that are leveraged, carry the risk of experiencing losses in excess of the invested capital.

It usually takes 15-30 minutes to open a brokerage account, and almost every broker offers the option to open an account online. When creating an account you will need, among other things, to scan two pages of proof and to complete the test of financial instruments (do not be afraid – you can not fail in this).

Once we have a brokerage account, buying shares is very simple. Adequate:

1. Transfer money to our investment account.
2. Select a company / company and place a buy order, setting a limit at the price at which we are willing to buy the “Securities”.
3. Depending on the liquidity of a particular company and the current valuation – someone will sell us shares in a few seconds / hours.
4. The shares will appear in our portfolio and we will be able to check regularly whether the price of our securities is higher or lower than it was on the date of purchase.
5. When stocks become more expensive or we want to reduce losses, we can sell our ‘stocks’.

To better illustrate the issue of buying stocks, let’s follow what it looks like in a specific example. We choose XTB for this purpose, because this Polish broker offers the option to buy shares without commissions (usually 0.38% with bank brokers) and offers securities of foreign companies – including US companies.

Buying shares on the stock exchange – eg XTB

1. The first point is to create a brokerage account. For this we need to go to the XTB website.

Go to the XTB website

2. In the upper right corner, select the “Open an account” button.

3. In the opened tab, we must provide your e-mail and indicate your consent to the processing of our personal data. Consent to receive marketing content is voluntary.

4. After entering the email, we set our password.

5. We now proceed to filling out the personal form. We must provide the name, surname, phone number, date and country of birth.

Our citizenship and tax residency declaration will also be completed on this page. If we settle accounts in Poland, then select the option – “I have a tax residence in Poland” (and also select – “I am not a US taxpayer”). Below, in the Customer Beneficial Owner Inquiry, we must indicate whether we are the owners of the money we want to spend on the game, or whether we want to invest on behalf of someone else.

6. On the next page we provide the country of residence and address. A window for entering the address will appear after clicking on the zip code. If the mailing address is different from our home address, we can also supplement it. IMPORTANT: The address must match the address that will appear in the document (such as an Internet bill) that we will use to check where we live later .

7. At this point, we choose the preferred currency in which we will conduct transactions and the language of customer service.

8. Now is the time to fill out a short questionnaire about your investment experience. There will also be a test on stock market problems (this test cannot fail – it only serves to decide which financial instruments we should invest in and which we should avoid). XTB did not offer this item due to its own “whim”. It is simply a requirement in line with the Capital Market Surveillance Act.

9. On the next page there are boxes to fill in, in which we give answers about education, profession and main source of income. On this basis, the broker assesses whether to start investing in the capital market – which, after all, is always associated with a certain dose of risk.

On this page, we also need to provide answers about our view of risk and investment objectives. We also present the amount of our income and the planned percentage of the funds that will be allocated to the purchase of shares. All of these comprehensive scoring questions are intended to discourage those who can’t afford them at the moment from taking risky investment steps. XTB, apart from the option to buy shares without a commission, offers the possibility of playing on futures contracts (CFDs) – it carries a high risk of rapid loss of funds.

10. We are slowly approaching the end of account registration. On the next page, we must give your consent to sign the contract electronically.

We should also point out that we are not a politically exposed person (nor a member of her family or close partner). Brokers do not make their services available to such people. And, finally, a very important problem – if we want the XTB account to be free – it will be necessary to select the option to provide information in electronic form, and not on paper.

11. After completing this step, the registration is complete.

12. Although the account has been opened, it is not yet active. For this, we need to verify who we are and where we live.

13. Account activation is possible in two ways. Quick check video or upload files to XTB server. In this case, you will need to scan two pages of our identity card (or passport) and some documents confirming our place of residence (for example, a bill for water, gas, Internet or electricity). Remember that all pillars of proof must be visible in the photographs .

After uploading the files – XTB will verify our account within a few hours .

We already have an account – it’s time to buy stocks

Once your account is activated, it’s time to deposit funds that will be used to purchase shares. We will do this by selecting the “Make Deposit” button in the lower left corner of the screen on the XTB platform.

We will show several ways to transfer money – by choosing the popular BLIK, the money will be in our account in just a few seconds.

Once we have funded the account ( important: the minimum purchase transaction for shares is PLN 500 ), we can proceed with the purchase of securities. To do this, look at the Market Watch tab that is open on the left side of the screen. Then choose the shortcut STC (Stocks – Akcje). We will be presented with two options:

If we are interested in real stocks, let’s expand the stocks tab. Stock CFDs are contracts on securities, not real shares.

After expanding this tab, we will see exchanges from different countries where we can buy shares.

When we choose our local market, we will see a list of companies whose securities we can buy.

By clicking on the name of the company, a buying and selling window will open. Let’s show it in the example of PKN Orlen. On the right and left there are “Buy” and “Sell” buttons and in the middle the number of shares we want to sell or buy. We can change it freely using the plus or minus buttons or by entering the number manually.

After selecting the “Buy” button, a window will open with confirmation of the transaction. Having accepted the selection, we will buy the shares, if, of course, there is an appropriate amount of funds in our account.

This method is a way to buy stock quickly. XTB is mainly used by day traders (who make a lot of trades per day), so the stock trading process has been simplified to the maximum.

However, we can also choose an order with a price limit, not an automatic buy. Just click on the little icon with the “+” sign, which is above the “Buy” button.

A window will open before us with two options.

Immediate Execution (the price is so low that someone is willing to sell us the shares right away).

Pending Order – Here we can specify the exact amount we want to buy the shares for. We also set the validity time of the order. Why would you use this option? Simply put – let’s say that the current price of one share of the company is PLN 100, but we will be interested in buying it for PLN 98. Therefore, we set a pending order, for example, for 3 days, calculating that the shares will already become cheaper and such a transaction will be possible.

Papers finally in your wallet!

Once we buy the shares, we will be able to view them in our portfolio. This is the bottom box titled “Open Positions”.

What do the items included in it mean?

• Size – The number of shares of a particular company we own.
• Market value – the current value of our shares.
• Opening Price – The price at which we bought one stock.
• Market Price – the current price of one security of a particular company.
• Net Profit / Percentage – the profit or loss that we made on a particular component of the PLN and as a percentage.

When the shares reach a satisfactory valuation in our opinion, we can sell them by selecting the Sell button.

It is more convenient to buy and sell shares, for example on XTB, on a mobile application.

Some tips at the end

• If you want to buy and sell shares frequently, choose for example XTB and not bank brokers, thanks to which you will not have to pay a commission. For transactions worth 1,000 PLN, usually in brokerages operated by banks, you will pay a commission “five”. With 10,000, it would be 50 PLN. If you make several transactions in a week, you will save several hundred zlotys on XTB.
• In addition to issues such as fashion for a particular company, always check the P/E ratio . Desirable values ​​of this ratio range from 5 to 15. If the P/Z is, say, 100 or 200, then this means that the valuation of a particular company has definitely deviated from the fundamentals and will be checked sooner or later by the market. This happened in Poland, for example, with shares of Allegro and CD Projekt, which after a period of “demand frenzy” returned to more realistic valuations.
• Do not be afraid of a bear market, because it is the best time to buy cheap securities.
• Don’t panic and if you are buying stocks for the long term, don’t sign in to your brokerage account. This will help you avoid making ill-informed decisions.

Buy stocks on XTB

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If you have ever been interested in CFDs, in addition to buying stocks, be aware of the risks associated with leveraged instruments.

Investments in OTC market instruments, including contracts for exchange rates (CFDs), due to the use of the leverage mechanism, have the possibility of incurring losses exceeding the value of the deposit. It is not possible to profit from trading OTC instruments, including Contracts for Difference (CFDs) without risking a loss, and therefore Contracts for Difference (CFDs) may not be suitable for all investors.