How to Trade the US Stock Market Online?

May 11, 2021 14:50 UTC
Reading time: 14 minutes

Did you know that the two largest stock markets in the world are both in the United States (US)? Both the New York Stock Exchange and the Nasdaq Stock Exchange stock markets are American stock markets, home to the world's most recognised companies such as Apple, Facebook and Google. The ability to access and trade in these stock markets has never been easier, and is one reason why individuals from all around the world are eager to learn how to trade the US stock market.

american stock market trade invest

Are you interested in learning how to trade on the US stock exchange? If so, you're in the right place. In this article, we will explain how to trade the US stock market, what affects the price movement of US stocks and how you could start buying or selling on the American stock market today!

 

What is the US stock market?

The first step in learning how to trade on the stock exchange is understanding what it is. The stock market is essentially an auction place where investors buy and sell shares of publicly listed companies. A stock market is controlled and regulated by a stock exchange.

But what is the American stock market called? For example, the US stock market is run by two of the world's largest stock exchanges - the New York Stock Exchange and the Nasdaq Stock Exchange. They help to facilitate all the buying and selling of shares in publicly listed companies like Amazon, McDonald's, Nike, Wal-Mart and more.

The total value of the US stock market fluctuates everyday depending on how much buying and selling is happening. According to the Intercontinental Exchange, who bought the New York Stock Exchange in 2013, the total value of the US stock market in the New York Stock Exchange on 31 January 2018 was over $30 trillion.

This has been calculated by using US stock market data from all of the thousands of companies listed on the exchange.

What is a US stock market index?

If you want to learn how to trade on the stock exchange, another common term to know is 'index'. As there is a wide variety of companies from different types of sectors listed in the US stock market, the exchanges created a selection of US stock market indexes to help economists, fund managers, journalists, traders and investors measure a section of the stock market.

For example, the following US indices are the three largest and most-recognised US stock market indexes in the US stock market and each has a specific focus:

  1. The S&P 500 Stock Market Index. This index measures the value of the largest 500 listed companies on the New York Stock Exchange and is considered as the best representation of the overall US stock market.
  2. The Nasdaq 100 Stock Market Index. This index measures the value of the largest 100 listed companies on the Nasdaq Stock Exchange. While this index includes companies from various industries - albeit mainly technology-related companies - it does not include financial industry companies like commercial or investment banks. The index is considered as the best representation of the US technology sector.
  3. The Dow Jones 30 Stock Market Index. This index was developed to track the US stock market performance in 1896 when individual company information was limited. The aim of the 30 stocks listed in the index is to reflect the dominant sectors that help the American economy.

This is why there are a variety of companies from all different sectors included in it. Over time some companies drop out and others are promoted. As of mid-2019 some of the Dow Jones 30 companies include American Express, Apple, Boeing, Coca-Cola, Disney, Goldman Sachs, McDonald's, Microsoft, Nike, Verizon and more.

Now let's look at how to trade the US stock market, how to access US stock market data to trade on and why using a US stock market chart could prove to be very useful in helping to make your trading decisions.

Did you know that you can trade on US stock market indexes, as well as on companies such as Apple, Facebook and Netflix all from one trading platform, which also happens to be completely FREE to download? Get your free download by clicking the banner below!

Trade With MetaTrader 5

How to trade the US stock market online

If you want to learn how to trade on the stock market or, more specifically, how to buy US stocks, the first thing is to know the trading tools you need to start:

1. Use a broker - How to buy US Stocks

If you want to buy shares in a particular company, such as Facebook, you need to find someone who not only owns some Facebook shares but is also willing to sell them to you. This is what your broker does for you.

Through your broker's trading platform they route your buy and sell orders to other buyers and sellers through their connection with the stock exchange that lists the shares of the company you are trading. This is a fundamental step in learning how to trade in the US stock market.

With the right broker you can buy and sell US stocks on an American stock market in seconds without meeting the person on the other side of your trade. A broker will also hold your capital to trade or invest with so it's important to choose the right broker when learning how to buy US stocks.

Finding one that offers the highest regulation, security and safety as possible will be very important to your experience buying US shares from the UK or any other location in the world.

For example, investment firms operating under the Admirals trademark offer the highest regulation from the UK's Financial Conduct Authority, the Australian Securities and Investments Commission, and Estonian Financial Supervisory Authority and Cyprus Securities and Exchange Commission.

Not only that, but those who choose to use the Admiral Markets fast, secure and free trading platform also benefit from a negative balance protection policy which will protect you from adverse movements in the market when you are buying US shares from the UK (or any other location in the world). It also gives you the ability to:

  • Open multiple types of trading and investing accounts such Invest.MT5 where you can buy shares in companies from 15 global stock exchanges and receive free free-time market data on the American stock market.
  • Open a CFD (Contract for Difference) trading account to long and short a market to potentially profit from rising and falling markets, as well as access leverage of up to 1:500 for Professional clients and up to 1:30 for Retail clients.
  • Access the fastest and most secure trading platform in the world, MetaTrader, for Web, Windows, Mac, iOS and Android operating systems.
  • Trade on multiple asset classes such as US stocks, international stocks, indices, commodities, currencies and cryptocurrencies.

Did you know you can access all of these features and test drive Admirals as a broker by opening a FREE demo trading account? This allows you to trade in a risk-free environment until you are ready for a live trading account. To open your free demo account, simply click the banner below:

Trade With A FREE Demo Trading Account

2. Use the best trading platform - How to access US stock market data

Your trading and charting platform will help you access important information you need to trade the US stock market. This includes US stock market news, US stock market charts and US stocks prices of different publicly listed companies.

With the advent of advanced trading technology, you can now have your charting platform and brokerage platform all in one place with the Admiral Markets MetaTrader suite of products. This means you can also access your order tickets when viewing US stock market graphs and general US stock market data.

Admiral Markets offers the following MetaTrader trading platforms:

  • MetaTrader Supreme Edition (A custom plugin for MetaTrader 4 and MetaTrader 5, created by Admiral Markets and professional trading experts)

Through the above platforms, you can trade across the US stock market, as well as a variety of other markets, such as US stock market futures and indexes, commodities, foreign exchange and other international shares.

3. Create a routine - How to trade US stock market hours

Let's look at American stock market hours. What time does the US stock market open and what time does the US stock market close?

Creating a routine of when you will analyse the American stock market can help in making high quality trading decisions. This is because if you know when you will be trading you can bring a high level of focus to it. The first step is to know the US stock market hours you can trade in.

What time does the US stock market open? What time does the US stock market close?

The US stock markets are located in New York with the New York Stock Exchange in Wall Street and the Nasdaq Stock Exchange in Times Square. Both open at 9.30 am and close at 4.00 pm New York time (Eastern time) Monday to Friday.

What time does the US stock market open UK time?

If you are from the UK and you want to invest in the US stock market from the UK, you want to know what time the US stock market opens UK time. The US stock market open time in the UK will be from 2.30 pm to 9.00 pm (UK time).

If you want to invest in the US stock market from the UK, there are several public holidays to be aware of during the year when it's closed. Using the Admiral Markets Economic Calendar can help you stay up to date.

What time does the US stock market open Indian time?

The American stock market timings as per Indian time (GMT+5:30) are 9 hours and 30 minutes ahead of New York time (Eastern time). So, if you want to invest in the US stock market from India, the American stock market opening times will be from 7.30pm to 1.30 am India time (GMT +5:30).

It's now time to discuss the most exciting step in learning how to invest in the American stock market - buying stocks.

How to buy US stocks? Open a trading ticket!

The next step in learning how to trade US stocks is to purchase some stock from the American stock market. Once you've opened your live, or demo trading account, downloaded your free trading platform and found the right routine for yourself you can then start to make trading decisions on the US stock market future and what shares to buy or sell.

This is where you really start learning how to trade on the US stock market. Now you're probably wondering how to buy US stocks in your MetaTrader trading platform? It couldn't be simpler, using the following steps:

  1. Open MetaTrader.
  2. Open the Market Watch section from the View menu at the top or by pressing Ctrl+M on your keyboard. This will open up a list of market symbols on the left side of your chart.
  3. Right-click on the Market Watch window and select Symbols or press Ctrl+U on your keyboard.
  4. This will then open the window shown below which details all the markets available for you to trade on.

charts for financial instruments

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

Now you can left-click on one of the symbols you would like to view and drag it on to the chart to view US stocks prices of the symbol you've chosen. From here you can now open up a trading ticket:

  1. Right click on the chart.
  2. Select Trading.
  3. Select New Order, or press F9 on your keyboard.
  4. A trading ticket will open for you to input your entry price, stop loss and take profit levels and unit size (volume).

stock price symbols

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

How to Invest in the US Stock Market from the UK

For those who want to learn how to trade US stock, the good news is that there are no barriers to trading based on your location, except for those who don't have easy access to the internet or the devices they need to trade.

Because trading and investing is available online via trading platforms like MetaTrader 4 and MetaTrader 5, if you want to invest in the US stock market from the UK, just follow the steps outlined above. That's it! They are the same for you as they are for anyone in any other location around the world.

To learn more on how to buy US stocks and how to invest in the US stock market from the UK (or anywhere else in the world), open your free Admiral Markets MetaTrader platform and watch the video below on how to trade on it!

Now you know how to buy US stocks and how to trade on the US stock market, the next step is to understand what affects US stocks prices so you can identify stocks on an American stock exchange that offer the best price movement for you to trade on.

What affects American stock market prices?

There are a variety of factors that affect prices of US stocks on American stock markets, such as:

1. The Economy

Stock markets in the USA (and elsewhere) generally move higher during periods of economic growth as this environment usually means higher employment, more consumer spending and more profits for companies. If companies begin to make more profits investors tend to buy more stocks of those companies which, in turn, helps to push up the overall stock market.

Therefore, investors pay close attention to economic data such as:

  • Employment numbers.
  • Central bank policy on interest rates.
  • Inflation reports.
  • Retail sales and consumer spending figures and more.

When learning how to invest in the US stock market, keep in mind that investors look for a trend among several different economic indicators rather than react on just one good or bad economic data point.

For example, if unemployment starts to rise and retail sales numbers start to fall it could translate into lower spending which could affect company profits. This may cause some investors to exit some investments and re-allocate their funds elsewhere, thereby affecting the overall stock market direction.

2. Politics

Another important point to consider when learning the US stock market for beginners, is the impact of politics on markets. some traders refer to news that affects the market as American stock market news (or English stock market news, etc.).

As the US government set tax policies and control overall spending and immigration, politics can have a big impact on the American stock market and how you might invest in the US stock market. The effect of politics on the stock market in USA (and elsewhere) is seen during election season where presidential candidates sell their policies to big businesses and consumers.

During these periods big stock market news is released to the public, influencing how traders invest in the US stock market and the markets experience changes.

For example, when Donald Trump was elected US President in November, 2016, the US stock market entered a very strong multi-year rally higher. This is because he promised lower corporate taxes for businesses which meant more profits in the vaults of American companies.

The initial effect on the US stock market and how people invest in the US stock market from the UK (and around the world) after Trump's election can be seen on an American stock market graph, such as this long-term price chart of the S&P 500 stock market index below:

us election trump wins stock market price

Source: Admiral Markets MetaTrader 5, SP500, Weekly - Data range: from Dec 27, 2015, to July 7, 2019. Accessed on Apr 25, 2021, at 4:07 pm BST. - Please note: Past performance is not a reliable indicator of future results.

However, it can also work the other way. For example, in 2017 Trump began a trade-tariff war with China, using Twitter to express his displeasure with Chinese trade practices. This uncertainty led US stock markets to enter a volatile and range based period, as highlighted in the S&P 500 price chart below:

us china trade negotiations stock price

Source: Admiral Markets MetaTrader 5, SP500, Weekly - Data range: from Dec 27, 2015, to Aug 21, 2019, accessed on Apr 21, 2021, at 4:07 pm BST. - Please note: Past performance is not a reliable indicator of future results.

Such events affect the way traders invest in the US stock market from the UK (and elsewhere). For some investors, it can be challenging to trade in such volatile times. This is why it's important to have access to the right trading products.

For example, Admiral Markets offers CFD (Contract for Difference) trading accounts which means a trader could potentially profit from rising and falling markets by 'shorting stocks'. This is an interesting way to invest in the US stock market from the UK. This is because CFDs offer leverage, which can multiply the size of your potential profits, but also your losses, making them extremely risky. CFDs are not something I recommend trading on the US stock market for beginners.

If you are interested in learning more about CFDs and how to trade the US stock market with them, you can have a look at this full, detailed article with everything you need to know about them:

But, during good economic times where the US stock market is rising many traders are buying us shares from the UK (and elsewhere) and holding them for a longer period of time. One benefit - on top of a potentially rising share price - is receiving a regular piece of the company profits via dividends.

Admiral Markets offers both types of trading and investing accounts giving both traders and investors the flexibility to trade the US stock market during different market conditions.

About Admirals

Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or recommendation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

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