While there is a lot of vocabulary unique to the investment arena you really only need to understand a few to get started. These are important for people who want to do their own investing.

Market Orders – This is an order you place with an online brokerage firm like www.ameritrade.com that tells them to sell or buy the amount of shares you specify in a given company at ANY PRICE they can get. Use market orders only on stocks that you MUST get out of today, this instant, no matter what. This is an unusual trade option that you should rarely use. Market orders are for emergency situations. Market orders are basically telling the brokerage house to sell or buy at whatever price they can get at this very moment. Think of a market order as someone going to a grocery clerk and saying I need change for this 100 dollar bill to make a phone call, give me what you can I don’t care I must make the phone call. Avoid Market Orders at all costs.

 Limit Orders – This is an order to buy or sell shares with a specified price. In other words you are telling the brokerage house to buy or sell at “xxx.xxx” and if they can’t get that price they do nothing with your shares. This is the type of order you should start with and is very common. This is especially true on stocks with low volumes of trading. This is telling the same grocery clerk give me 100 in change for the 100 or I’ll go elsewhere, much wiser.

Short  Sell – This is an order to sell shares of a company that you do not own, you MUST BUY them back later so you are praying that the price is going to go down, if not. you stand to lose your initial investment and the losses can keep going until you lose everything you have and then a lot more. Don’t SHORT the risk reward ratio is terrible. The most you can make is 100% of your money and if your wrong and the stock price rises, your loses are limitless.

Long Buy – This is an order to buy shares of stock and go what’s called long. You are buying a part of the company and holding the stock in your account. You are betting the stock will go up in price. This has a good risk to reward ratio the most you can lose is 100% of your money and you stand to make a limitless return.

GTC Good till cancelled – This is the duration that an order you give a broker is good for, for example if you place a Buy Limit Order for 5000 shares of CMNN and give it a GTC status the brokerage will attempt to buy those shares today, tomorrow and until they can at the price you specified.  

End of day – This tells the brokerage house to keep trying to fill your order until the end of the current trading day. If they don’t fill it today they will not try again.

Number of shares Volume- This is the number of shares you wish to purchase or sell, also called volume.

If you master these few terms you are ready to start purchasing your first shares of stock. Now the hard part, find that diamond in the rough to invest in, the next step is opening a trading account. This is a lot easier than you think. Here is a list to choose from click here.