Free Online Stock Trading Course: A 6-Module Plan for Beginners

Module 1: What do you own when you buy a share?

This free course is a reading list with tasks. Work through it at your own pace with a notebook. It covers long-term investing and short-term trading, but you do not need to trade often to invest. By the end, you should be able to explain a decision, work out its costs and see what you don't know.

Start with stock market basics. A share is a small piece of ownership in a company. Explain in your own words how owning a share differs from owning a fund, and from keeping cash in a bank.

When you buy a share on a stock exchange, your money usually goes to another investor who is selling, not to the company. The company raised its money when it first sold those shares.

Module 2: What is the money for?

Use the first investment plan to choose a made-up goal, a time horizon and a monthly amount you could afford. Then describe a situation where you might need the cash sooner than planned. This is practice, not an instruction to open an account today.

Read the SEC's guide to asset allocation. It explains why a mix of investments that suits one goal can be wrong for another. Your task: write two or three sentences on which losses your plan could survive, and which it could not.

How long you stay invested matters too, not just how much you put in. The tool below shows how growth builds up over the years, using an assumed 6% yearly return. Actual returns jump around and can be negative for years at a time. Inflation also cuts what your money will buy.

Module 3: How is a company different from a fund?

Study market capitalization, which measures a company's size on the stock market. Then fill in a small worksheet for one company and one broad fund:

• For the company: how it makes money, how much it owes and its main risk.
• For the fund: its goal, its largest holdings, its yearly costs and how concentrated it is. Most funds publish a short fact sheet with these numbers.

A fund is not automatically safer in every way. A narrow fund can still put most of your money into one industry. A broad fund still falls when the whole market falls.

The point of this module is to describe what you own before you talk about returns. Your task: write one sentence for each that starts, 'I would lose money if...'

Module 4: Where do you find reliable company facts?

Go to the source. US companies file their reports on SEC EDGAR. For Canadian companies, the CSA's national systems page explains where to find filings on SEDAR+. In each report, read three parts: the business description, the risks and the cash flow statement.

Write down the period each number covers. That way you won't compare a full year with a single quarter by mistake. Check the report's date too, because an old report can describe a business that has since changed.

Your task: write one claim that the report supports, and one question it leaves open. A report can name a risk without saying when it might happen. And a forecast in management's comments is not a result.

Module 5: What will an order really cost?

Work out every trade before you place it. Say a practice account holds $500. The ask, the lowest price a seller will accept right now, is $24.90, and the commission to buy is $2.

Twenty shares cost $498, plus $2, which uses all $500. If the price rises to $25 before your order fills, the same order costs $502 and no longer fits.

Now compare a market order with a limit order at $24.90, using the SEC's order definitions. Explain why a limit order controls your price but may not fill. An order preview is not a promise of the price you will get. Remember the hidden costs as well: the gap between the buying and selling price, and currency conversion if you buy shares priced in another currency. To go deeper, read market, limit and stop orders.

Module 6: How do you practise without real money?

A practice portfolio lets you check orders, follow dividends and compare results with your original reasons. Use virtual money, but keep the balance close to what you might really invest, and add made-up fees.

Keep the losing trades in your record. Don't reset the account after a bad week, and don't count only the winners. A practice profit is not a qualification. A simulator may also differ from your broker's real prices, costs and rules. To pick one, see our stock market simulators guide.

Write each trade into a paper trading journal: what you planned, what happened and what you learned. Your task: complete five practice trades and review them. Before the first one, find three screens in your practice app: your cash, your open orders and your positions.

Final task: can you write a one-page plan?

Take a made-up $1,000 portfolio. On one page, write your goal, how you would split the money, your evidence, the costs, the risks and a date to review it.

Repeat any module you can't explain clearly. If you want to try another course too, read our guide to finding a good free stock trading course. Ask any course for its syllabus, how it tests you, which country's rules it covers and how it makes money. A certificate, a leaderboard or a dramatic success story does not prove that someone can invest.