“How do you trade stocks online in Canada?” It’s a question my friends (and blog readers) often ask me. The only reason trading stocks online in Canada is tricky is because you don’t learn it in school.
So consider this your crash course for trading stocks online in Canada.
Trading Stocks Online in Canada — Need To Know Info:
Trading stocks online in Canada isn’t talked about much on the day-to-day. Maybe it’s because we are all too polite (and awkward) to talk about money. But you needn’t worry any longer! Because trading stocks online in Canada is very easy. And there’s definitely something for everyone (no matter what your income or risk tolerance is). That’s what you need to know.
But if you’re just getting started:
And if you don’t know anything at all about trading stocks online in Canada, the single best investment you can make is by reading the Money Sense Guide To The Perfect Portfolio. It is a really short book that is easy to understand and highly illustrated. You can read it in an afternoon and it will give you a really digestible look at your investing options as a Canadian.
If you’re ready to get going a little more actively, here are some starting points…
3 Ways To Trade Stocks Online in Canada:
Here are three ways you can quickly get stated trading stocks online in Canada. They are presented from easiest to most complicated. If you have TFSA contribution room I recommend you start there. If you’re young I think the TFSA especially makes sense because you can defer your RRSP contributions to when they tax benefit will be higher.
So once you open a TFSA at your bank, here are your options for trading stocks online in Canada:
- Buy Index Funds/Mutual Funds Through Your Bank: If you already bank at a major Canadian financial institution you will be able to easily open a TFSA. You can access this account through your regular online banking and you can transfer money in any time to buy your designated funds. I think the best case scenario is to open a TFSA with TD and buy their e-series funds which are the lowest fee mutual fund in Canada (and note – you can only buy them online). If you’re feeling a little more feisty about your stock trading options…
- Buy ETFs in a Brokerage Account: If you want to be a little more hands on with your asset allocation then opening a brokerage account and buying ETFs is an easy next step. You can choose a discount Canadian online stock broker and then buy ETFs each month by transferring in money from your bank account via online bill payment. It’s really quite easy. If you sign up with Questrade (see below) they will let you buy the ETFs commission free, which is a hard value proposition to argue with. This is still a buy and hold approach but gives you a bit more selection on what you want to invest in and you aren’t paying any fees to an adviser. Note that you usually need at least $1,000 to open a brokerage account.
- Use a Canadian Online Broker to Trade Stocks: Trading stocks in Canada is easy because there are a number of discount brokerages you can use. From the research I’ve done Questrade, has the cheapest fees. They also have a mobile app and a pretty good trading platform. You can also open a practice stock trading account to get familiar with the ins-and-outs of trading stocks online in Canada. Once you’re ready: You can open a TFSA with Questrade and then just transfer money in from your bank account. It’s easy. And then you can buy and sell stocks at will. Just one word of warning: Questrade is a discount broker so although they are cheap they don’t give you much service. Much of the negative reviews on the internet about Questrade are from people who are in over their head and needed more hand-holding. In my experience they have good support you just need to be proactive about it and give them a call/live-chat. I can also give you 10 free trades (more below) so that can ease the growing pains.
So there you have it…
I know that’s a lot of information, but does it all make sense? You can take it slow. No pressure. And hey…
If you want to see a little more about trading stocks online in Canada, check out this short video I made…
Trading Stocks Online in Canada [VIDEO]
Trade Stocks Online in Canada Free
If you are interested in getting started trading online, specifically by opening a brokerage account, then please contact me. You can use the Stock Ideas Contact Form to send me a short message. Then I can give you a special link that entitles both of us to 10 free trades. This is worth $50 and can go a long way in helping your online stock trading get started on a profitable foot.
So send me a note, will ya? If you’re in Canada, why not get more proactive with your money and trade your own stocks online.
And by the way: If you find yourself short on stock ideas, sign up for email updates below to get exclusive trading ideas available only through email.