2025 Stock Trading Beginner's Complete Guide: A Zero-to-One Investment Roadmap

Looking to enter the stock trading market but don’t know where to start? Watching others share their investment insights and profit screenshots, have you also considered giving it a try? Don’t worry, this guide will help you systematically understand the core concepts of stock trading and find the investment approach that suits you best.

First Step in Stock Trading: Choosing the Right Trading Platform

Before deciding to enter the stock market, you need to find a reliable trading platform. Currently, there are many options available, from traditional established brokerages to emerging online trading platforms. But how do you select one to ensure your interests are protected?

Transaction Fees Cannot Be Ignored

Different platforms have varying fee structures, which directly impact your long-term returns. For Taiwan stocks, transaction fees are usually around 0.1425%, but many brokers offer discounts for electronic orders. For US stocks, pay special attention to whether there is a minimum fee per trade, as this can be disadvantageous for small investors. Be sure to compare in detail before choosing, because seemingly minor differences can have significant effects over time.

Ease of Use of the Trading Interface Is Critical

Beginners should prioritize platforms with intuitive operation and simple app design. If you plan to trade frequently in short-term strategies, choose a platform with fast quote updates and stable systems to avoid lag during critical moments. Spending time on demo accounts to experience the platform is a wise move, allowing you to find the most suitable tools without risking real funds.

The Importance of Localization Services

For investors using overseas platforms, Chinese language support and local customer service are especially important. Platforms with Chinese interfaces and customer support in Taiwan can effectively solve time zone issues. When questions arise during trading, you can get help promptly. Additionally, platforms that support NT dollar deposits and withdrawals can save you the hassle of currency exchange, allowing direct bank transfers for fund management.

Taiwan Stocks vs. US Stocks: Two Different Investment Routes

Advantages and Limitations of Taiwan Stock Investment

For domestic investors, Taiwan stocks have natural advantages. Investors are more familiar with local companies’ operations and industry trends, which provides an informational edge for making smarter investment decisions. Moreover, local regulatory authorities supervise the market more strictly, which can help reduce investment risks to some extent.

However, Taiwan stocks also have obvious limitations. The smaller market size results in limited liquidity, and large capital inflows or outflows can cause significant stock price fluctuations. Some listed companies still lack transparency in financial information and corporate governance compared to international giants, requiring investors to conduct more due diligence.

The costs of trading Taiwan stocks include a transaction fee (0.1425% of the transaction amount) and a securities transaction tax (0.3% upon selling). If you choose to invest indirectly through funds or ETFs, additional management and manager fees (usually between 0.2% and 2.5%) should be considered.

Opportunities and Challenges of US Stock Investment

The US stock market offers far more investment options than Taiwan stocks. You can directly trade shares of top global companies, from tech giants to medical innovation firms. Emerging industries like artificial intelligence and electric vehicle manufacturers are also listed in the US, providing opportunities to participate in global economic growth.

US stock trading costs are relatively low, with no securities transaction tax (selling Taiwan stocks incurs 0.3%), which is especially beneficial for long-term investors. An ETF can help you quickly build a diversified portfolio, spreading risk across multiple countries. The US’s strict regulatory system ensures transparency, with listed companies’ financial statements audited, making fundamental analysis more reliable.

However, investing in US stocks also involves overcoming several obstacles. First, the time difference means US market hours (9:30 am to 4 pm ET) coincide with Taiwan’s night to early morning (9:30 pm to 4 am), posing challenges for investors needing full-time attention. Second, exchange rate fluctuations between TWD and USD can eat into your gains. Additionally, researching US companies requires more time, as many industries and business models differ significantly from the local market.

Practical Methods of Stock Trading

Trading Individual Stocks via Securities Accounts

This is the most traditional method. For Taiwan stocks, you need to open an account with a local securities firm; for US stocks, you can choose to use a domestic broker’s omnibus account or directly open an account with a US broker.

Fees involved in omnibus trading include order commissions (0.25% to 1%, depending on the platform), exchange fees, and trading activity fees. Overseas brokers often charge lower fees, with order commissions possibly as low as 0% to 0.1%.

The account opening process is relatively simple—you need to prepare identification and a seal, then complete the application at the broker’s office or online. Many modern platforms support fully online account opening, allowing quick setup without visiting a branch. When placing an order, simply search for the stock code (e.g., TSLA for Tesla), select the quantity, and confirm.

Contract for Difference (CFD) Trading Mode

CFD is a trading method that does not require holding actual stocks. You profit by predicting price movements. The advantage is the use of leverage, allowing control of larger positions with less capital. A single account can trade multiple asset classes, including stocks, forex, commodities, etc., suitable for investors seeking diversification.

Costs for CFD trading mainly include spreads (buy-sell price differences) and overnight financing fees. Leverage amplifies both gains and losses, so risk management is crucial. Beginners should start with lower leverage, typically 1x to 2x, to understand market operation. CFD platforms often offer demo accounts for practice; it’s recommended to familiarize yourself thoroughly before trading with real money.

Note that CFD trading does not involve actual ownership of stocks, so dividends cannot be received. Also, choose platforms carefully—ensure they are regulated by reputable international authorities to safeguard your funds.

US Stock ETF Investment Strategies

ETFs (Exchange-Traded Funds) represent a basket of stocks, providing automatic diversification. US stock ETFs have similar trading costs to individual stocks but only one-third of the trading tax, saving costs over the long term. Management fees are usually between 0.03% and 0.2%, much lower than actively managed funds.

S&P 500 ETFs and global market ETFs are ideal starting points for beginners. These funds include hundreds of quality companies, allowing you to achieve broad diversification with a single investment. Combining with regular fixed investments can further reduce the average cost, making it suitable for long-term investors.

Basic Knowledge of Stock Trading

Essential Market Terms to Understand

Before entering the market, mastering basic terminology can prevent confusion when executing orders. Concepts like market orders, limit orders, and indices are crucial for correct trading. It’s recommended for beginners to consult professional stock terminology glossaries to ensure clear understanding of each concept.

Trading Hours and Trading Units

Taiwan stock trading hours are Monday to Friday, 9:00 am to 1:30 pm, with no lunch break. US stock trading hours are Monday to Friday, 9:30 am to 4:00 pm ET (which is 9:30 pm to 4 am Taiwan time), with pre-market and after-hours trading available.

Trading units vary by market. The minimum trading unit for US stocks is 1 share, very friendly for small investors. Taiwan stocks are usually traded in lots of 1,000 shares (1張), but fractional trading is supported. Hong Kong stocks vary by stock, with minimums of 20 or 100 shares.

Effective Market Monitoring Tools

There are many free online platforms providing real-time stock prices, candlestick charts, and technical indicators. These tools are sufficient for beginner investors to understand price movements and basic technical analysis.

Stock data includes current transaction price, previous closing price, opening price, and daily high and low. Beginners should first learn to read these basic data points and understand how prices change with trading volume. As experience grows, you can learn more advanced tools like candlestick patterns, moving averages, MACD, etc.

Systematic Approach to Stock Picking for Beginners

Start with Familiar Industries

The easiest way to make correct investment decisions is to invest in industries you truly understand. If you frequently use tech products, focus on semiconductor and consumer electronics companies; if you are sensitive to consumer behavior, food and retail companies are better choices. This approach’s advantage is that you already possess basic industry knowledge, enabling you to identify quality companies.

Prioritize Large-Cap Companies

Companies with larger market capitalization and high visibility tend to be more stable and less susceptible to short-term hype. Industry leaders usually have stronger competitiveness and risk resistance, suitable for risk-averse investors.

Use Fundamental Indicators to Assess Value

Price-to-earnings ratio (P/E) and dividend yield are important metrics for evaluating stock valuation. These data can be found on free stock screening websites, helping you judge whether a stock is reasonably priced.

Build a Balanced Portfolio

Avoid putting all your funds into the same type of stock. Combining dividend-paying stable companies with growth-oriented firms seeking capital appreciation can adapt to different market conditions and improve overall return stability.

Risks Every Beginner Investor Must Know

Long-term Impact of Broker Selection

Seemingly small differences in fees can have a huge impact over a ten-year investment horizon. Choosing a platform is like choosing a partner—be cautious. When your trading volume reaches a certain level, negotiate for better rates.

Thorough Preliminary Research Is Essential

Before investing, you must understand the company’s basic information, including core business, financial health, and recent news. Many investors rush into the market without sufficient knowledge and end up trapped at high prices.

Strictly Follow Risk Management Rules

Setting reasonable stop-loss and take-profit points is fundamental for professional investors. It’s recommended to sell part of your position when profits reach your target, and set trailing stops for the remainder; if losses exceed your preset limit, cut losses decisively. Don’t hold onto the hope of a rebound or delay stop-loss. Many retail investors suffer losses because they take profits too early and hold onto losses too long.

Find an Investment Pace That Suits You

Intraday trading requires full-time market attention; dividend investing suits working professionals and retirees; swing trading demands strong technical analysis skills. There is no one-size-fits-all method—only what fits your style.

Recommendations for Starting Stock Trading

For complete beginners, it’s advisable to follow these steps:

First, open a demo account on your chosen platform and trade with virtual funds for at least three months. This allows you to fully familiarize yourself with the interface and basic operations. This stage involves no real costs and is the best learning opportunity.

Second, keep your initial investment small, within an amount you can afford to lose. This reduces actual risk and helps you test your psychological resilience under real trading conditions.

Finally, record the reasons and outcomes of every trade. Regularly review these records to identify common traits of successful and unsuccessful trades. This is the most effective way to rapidly improve your investment skills.

Stock trading is not gambling but an activity that requires knowledge, discipline, and patience. Following these guidelines, you will be able to build your own trading system and steadily progress in the market.