Share trading for dummies – learn how to invest in the share market

Everything you need to know about getting started in shares.

If you’re looking to build a secure future for yourself and your family, investing in shares could help you generate wealth and achieve your financial goals. But if you’re new to investing, it’s hard to know where to start.

So let’s take a look at the basics of buying and selling shares in our guide to shares for dummies.

Share Trading Account Offer

eToro

USD 2

Standard brokerage - US shares

Share Trading Account Offer

Get $0 brokerage on US, Hong Kong and European stocks with trades as little as $50 when you join the world's biggest social trading network.

  • US$2 brokerage for AU, US, Hong Kong and European stocks
  • Trades starting from $50
  • Fractional shares
  • Copy top traders
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Important: Share trading carries risk of capital loss.

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Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.

Name Product AUFST Price per trade Inactivity fee Asset class International
eToro
Exclusive
eToro logo
US$2
US$10 per month if there’s been no log-in for 12 months
ASX shares, Global shares, US shares, ETFs
Yes
Exclusive: Get 12 months of investment tracking app Delta PRO for free when you fund your eToro account. T&Cs apply.
Trade stocks, commodities and currencies from the one account and get access to social trading.
CMC Invest
Finder Award
CMC Invest logo
$0
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
$0 brokerage on US, UK, Canadian and Japanese markets (FX spreads apply).
Trade over 45,000 shares and ETFs from Australia and 15 major global markets. Plus, buy Aussie shares or ETFs for $0 brokerage up to $1,000 (First buy order of each security, each day - excludes margin loan settled trades).
Tiger Brokers
Finder AwardExclusive
Tiger Brokers logo
US$1.99
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Finder exclusive: Get 10 no-brokerage US or ASX trades in the first 180 days, plus US$30 NVDA shares (+US$30 TSLA shares ) when you deposit AU$2000 or more. Get 7% p.a. on uninvested cash for 30 days. T&Cs apply.
Trade US, Asian and CHESS-sponsored ASX stocks and US options.
Moomoo logo
US$0.99
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Finder exclusive: Unlock up to AUD$4,000 AND US$4,000 in $0 brokerage over 60 days. T&Cs apply.
Trade US, Asian and CHESS-sponsored ASX stocks and get access to social trading
Superhero logo
$2
$0
ASX shares, US shares, ETFs
Yes
Sign up with code ‘finder24’ and get US$10 of Nvidia stock when you fund your account with $100 or more within 30 days. T&Cs apply.
Enjoy US$2 brokerage (other fees may apply) on US stocks and buying ETFs as well as $2 fee to trade Australian shares up to $20,000.
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Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Share trading basics

The sharemarket is a place where investors can buy and sell “shares” in public companies. Also known as stock exchanges, share markets exist in countries all over the world – in Australia our national exchange is the Australian Securities Exchange (ASX), while other famous international stock exchanges include the New York Stock Exchange and the London Stock Exchange.

A share is basically an ownership portion of a company. When you buy shares you become a shareholder, meaning you own a percentage of a company and get to have a say in how it is run. The value of your shares is influenced by a wide range of issues, including the company’s performance and earnings, supply and demand, and broader economic factors.

Once you own shares you can also sell them to other investors. In the past, share trading was done physically at a stock exchange – you’ve probably seen old news footage of chaotic scenes of traders yelling out complex orders to buy and sell shares.

Today, investors can buy and sell shares via online share trading platforms. Many major Australian banks offer share trading platforms, including the Big Four, while other share trading platforms are offered by specialist brokerage firms.

How can I make money trading shares?

There are two main ways to make money selling shares:

  1. Capital growth. This occurs when you sell shares for a higher price than what you paid for them. For example, you may have purchased 100 shares in Company A two years ago, with each individual share valued at $5 meaning an initial investment of $500. In the ensuing period, the value of one share in the company has risen to $9, so your total parcel of shares is now worth $900. It can be sold for a profit of $400.
  2. Dividends. Many public companies pay dividends to their investors. A dividend is basically a shareholder’s portion of the company’s profits – for example, a company may offer a dividend of 50 cents per share to its shareholders, so you would receive a total dividend payment of 50 cents multiplied by the number of shares you own. Not all companies pay dividends, but those that do typically pay them twice a year. By choosing shares with a long history of providing dividends to investors, you can use your share portfolio to provide an ongoing source of income.
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What are the benefits of share trading?

Share trading provides many benefits to investors, including:

  • Shares typically grow in capital. Buying shares allows you to benefit from the growth in value of an asset over time. If you hold the shares for more than 12 months you can also take advantage of a 50% capital gains tax (CGT) discount.
  • If chosen correctly, it can generate income. Shares in companies that pay dividends can be used to provide an ongoing source of income.
  • There are tax benefits if you fall into the highest income tax bracket. If a company has already paid tax on its profits, the dividends it pays come with franking credits attached. These credits can be used to offset the amount of tax you pay on your other income.
  • Rights issues. Some companies make rights issues, which basically allow shareholders to purchase more shares in the same company at a discounted rate and usually without paying any brokerage fees.
  • Ownership benefits. Owning shares means you get to have a say in how a company is run, including voting on board resolutions and attending annual general meetings (AGMs).
  • Shareholder discounts. Some companies also offer discounts to shareholders when they purchase goods or services from the company or its subsidiaries.

What are the risks associated with share trading?

Just like any other form of investment, shares come with a range of risks attached, including:

  • Shares are volatile and are considered risky. Share prices can rise and fall quickly – prices in a company can even fall to zero and you could lose the money you invest.
  • Shares don't always pay dividends. Dividend amounts are not constant. They will fluctuate in line with the company’s profits.
  • Shares tend to decline in value during bad economic times. Some shares, for example mining shares, tend to be cyclical – investing at the wrong time of the cycle can be costly.
  • Last in line if corporation liquidates. If a company goes broke, its shareholders are the last of its creditors to get their money back.

How do I choose which shares to buy?

Despite what some people and investment “experts” might tell you, there is no guaranteed method for choosing the right shares. Some shares offer a high risk/high reward approach: while they have the potential to increase in value quickly, they also have the potential to quickly drop in value. Other shares tend to be steadier performers and have a history of delivering solid profits and paying dividends to shareholders.

There are income shares, blue-chip shares in large companies, cyclical shares that rise and fall with economic trends, and even defensive shares that often maintain their value when the rest of the economy takes a dive.

The right shares for you will depend on your financial goals, your investment timeframe and your appetite for risk. Once you know exactly what you want to achieve with your share trading, you can start researching different companies and the benefits they will bring to your portfolio.

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All sounds great, how do I get started?

If you want to start trading shares, there are a few simple things you need to do:

  1. Compare and choose share trading platforms. Check out our reviews of online share trading platforms.
  2. Sign up for an account. You will need to provide your name, contact details, proof of ID and bank account information.
  3. Choose the shares you want to buy. Research the performance, earnings and future potential of a range of companies. It’s also important to consider your overall investment strategy and appetite for risk before choosing any shares.
  4. Place a buy order. Your share trading platform provider should offer guides and advice on how to do this. The minimum amount of shares you can buy is $500, while your share trading platform will also charge a brokerage fee (typically around $15-$20) for placing the trade.

How to invest for beginners


Share trading can help you generate wealth and reach your financial goals. Just make sure you’re fully aware of all the risks involved before you place your first trade.

Frequently Asked Questions

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Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.
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Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio

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