First, if you're going to buy or sell a stock(trade) it has to be done by a licensed broker, who is employed by a registered brokerage firm. You will then set up an account with the brokerage firm. Every time you trade you will pay a commission to the brokerage firm - they have to make money too.

How To Buy/Sell Stock And Open Up An Account

The first thing is to decide if you want an account with a full service brokerage firm, a discount brokerage, or an on-line deep discount broker. The choice depends on your needs.. Do you want research reports and advice from the full service broker. Do you know what you want to buy and just need the broker to take the order and get it filled. Or do you want to place a few trades through each and have access to research reports from the full service broker. Remember that a full service broker is going to charge you significantly more than a discount broker. Setting up the account is relatively easy. The firm will send you an application form which is similar to opening up a savings or checking account. Fill out the forms and mail them back with a check. Once your account is set-up you can buy/sell stock.

You have to shop carefully for the type of broker that will meet your needs. Once you have an account with a broker remember it doesn't have to be for life - if there are things you don't like about the service, commissions, etc. move to another one. Its easy to move your account to another brokerage.

I found the print and on-line edition of Smart Money Magazine to have an excellent annual review of both full service and discount, on-line brokers. Very comprehensive comparisons of all major brokerage. I used this when I chose my broker.

An excellent site for evaluating on-line brokers is Gomez Advisors, and GomezWire. Their Internet Broker Scorecard lists the current top five online brokerages. They rank the brokerages on ease of use, consumer confidence, and overall costs.

• A couple of things that were important to me:
  Were the monthly statements easy to read - they'll send you samples.
  

• I wanted an office in my local area - if there is a problem I want to talk with someone in person.

Additional Sources:

An excellent article "Surfing With The Bulls - New Kids On The Street" at  http://www.zdnet.com/yil/content/mag/9801/bullsnewkids.html - explains some of the pitfalls, how they do it for $9.95 - very informative a must read. There are three other articles in the series about on-line investing that are also excellent 

Choosing a Discount Broker at http://www.sonic.net/donaldj/ 80 discount brokers are ranked and sorted a variety of ways.

On-Line Trading Tips at http://www.investhelp.com/stock_research.shtml

"Brokers Shift Marketing Gears"- article on how the on-line brokerage's are marketing to the 20-40 yr. old population - they're banking on these young people being in the market for many, many years. Its at http://www.news.com/SpecialFeatures/0,5,18071,00.html

Types of Orders You Can Place

The Market Order is the most common. When you place an order at the market, you are telling the broker to buy or sell the stock at the best possible price at that time. A market order will always be filled. It may not be filled at the price you expected or wanted. For example, you want to buy Intel.. You call your broker and he says Intel is currently trading at 80 bid 80-1/8 ask. The bid is the price the specialist is willing to buy the stock at. The ask is the price the specialist is willing to sell the stock at. You tell him to buy 100 shares of Intel at the market. When the broker gets back to you, he tells you that he bought 100 shares of Intel at 80-3/8. Between the time you gave the broker the order and the order was filled by the specialist, the price went up. Keep in mind, that the price of Intel could have easily been filled at 80-7/8 had more people been selling rather than buying at that time.

A Limit Order is an order by you to your broker to buy or sell a specific amount of stock at a specific price or better. If the price you specify is not within the current market quote, it is said to be away from the market and will be entered into the specialists book beneath any other orders in the specialists book. This means there are shares ahead of you. Orders in the specialists book get filled in the order that they were received. This happens quite frequently. There is no guarantee that a limit order will ever be filled.

You have to decide which is best for you - an order that might be different than what you expect, or getting the price you want but perhaps not getting filled.

A Stop Order is an order which becomes a market order to buy or sell once the stock hits the target price.

A Stop Limit  means that as soon as a trade occurs at the target price, the order becomes a limit order to buy. A sell stop limit order means that as soon as the stock hits a target price, the order becomes a limit order to sell.

Day Order - Just as the name says this order is for the day only. At the end of the day if the order is not filled, it is discarded.

Good Till Canceled (GTC) - An order which is Good Till Canceled, GTC, means that until you tell your broker to cancel the order, the order remains open on the specialists book and can be filled any time. The GTC order has to be reconfirmed by the broker every six months. This is not six months from the time the order was placed. The exchanges decided that the last business day in April and the last business day in October are the days when GTC orders must be reconfirmed. This is a protection for you.

Fill or Kill - order are usually used for options and futures trading. Usually, it's placed with a time limit. For example, a 15 minute fill or kill means that if the order is not filled in the next 15 minutes, kill the order.

Cautions/Thoughts

When dealing with brokers if you don't understand something ASK! It's their job to explain whatever information you need to you. When working with a full service broker remember they are selling something - just because they're a broker doesn't mean they're experts on all types of investments, all industries, or stocks. What you are getting is the firms analysts & research department recommendations - which is fine. Keep in mind that this individual broker may not know as much as he wants you to think he does.

NEVER EVER BUY STOCK OR ANY OTHER TYPE OF INVESTMENT FROM AN UNSOLICITED PHONE CALL!
There are lots and lots of scams out there - don't be a victim!

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