Complete Guide to U.S. Stocks: Learn How to Profit in the Stock Market from Scratch

US Stocks as the largest and most mature stock market in terms of global trading volume, attract the attention of investors worldwide. This market features top global companies such as Apple, Microsoft, and Google, with transparent trading systems and few restrictions, making it an important choice for investors to diversify their asset allocation. However, for beginners, Getting Started with US Stocks involves understanding many aspects—what are the trading rules? How much capital should be prepared? How can profits be made? This article will comprehensively unveil the mysteries of the US stock market.

Understanding the Trading Rules of the US Stock Market

To invest in US stocks, first master the basic trading system. The US stock market consists of three major exchanges: the New York Stock Exchange (NYSE), NASDAQ, and the American Stock Exchange (AMEX).

Trading Hours (Note the Time Zone Conversion)

US stock trading hours are based on Eastern Time (GMT-5):

• Regular Trading Hours: Monday to Friday, Daylight Saving Time 9:30-16:00, Standard Time 10:30-17:00
• Pre-market Trading: Monday to Friday, Daylight Saving Time 4:00-9:30, Standard Time 5:00-10:30
• After-hours Trading: Monday to Friday, Daylight Saving Time 16:00-20:00, Standard Time 17:00-21:00

Investors in different regions need to convert these times according to their local time zones to seize trading opportunities.

Other Key Regulations

Choosing the Right US Stock Account Type for You

Different account types determine your trading permissions and risk tolerance. US brokers typically offer three types of accounts.

Cash Account is the most basic option, with a relatively low account opening threshold, usually around $500. This account can trade stocks and ETFs but does not allow short selling. It adopts the T+0 trading system with a T+3 settlement cycle. Suitable for conservative investors and beginners.

Margin Account requires more initial capital, generally over $2,000. Its core advantage is the ability to use leverage for margin trading, allowing both long and short positions, with higher trading flexibility. It also supports T+0, enabling investors to seize market opportunities promptly. Margin accounts are especially suitable for experienced investors looking to amplify returns.

CFD (Contract for Difference) Account has become popular in recent years as an innovative trading method. The trading threshold is very low, with a minimum margin of only $50-100, supporting micro-lots of 0.01. This method also allows leverage to magnify profits, making it particularly suitable for short-term traders and investors employing advanced trading strategies. However, leverage trading carries higher risks.

Why Invest in US Stocks

Lowest Cost Stock Trading Options

One of the most prominent features of US stocks is the absence of minimum lot restrictions—investors can buy as little as 1 share. This significantly reduces investment costs. For example, Tesla’s stock is about $260 per share, so investors can participate with just $260. In comparison:

• Malaysia stock market’s minimum trading unit is 100 shares (1 lot). For Genting (4715.KL), at RM5.5 per share, the minimum is RM550.
• Taiwan stock market’s minimum is 1000 shares. TSMC (2360.TW) at NT$1065 per share, minimum NT$10,650.
• Hong Kong stocks usually have a minimum of 100-1000 shares, with higher trading costs.
• China A-shares minimum is 100 shares. Changshan Beiming (000158) at ¥25.63 per share, minimum ¥2,563.

Clearly, the low threshold advantage of US stocks is obvious, making it especially suitable for small investors and those with limited funds.

Rich Investment Choices

The US stock market has over 8,000 listed companies, far exceeding other stock markets. Many internationally renowned companies choose to list in the US, including Alibaba, JD.com, and TSMC. This is because the US financial market has the highest liquidity, providing maximum convenience for corporate financing.

NASDAQ, in particular, gathers global tech innovation companies, with giants like Apple (AAPL), Amazon (AMZN), and Google. Many promising startups also choose to list here, offering investors opportunities to participate in innovation and growth.

Market Depth and Transparency

The US stock market’s daily trading volume often exceeds 10 billion shares, with active participation from global investors. This enormous market size means manipulation is highly unlikely, and market transparency and fairness are guaranteed. In contrast, other countries’ markets are relatively smaller, and small-cap stocks are more susceptible to manipulation.

Additionally, as the world’s largest economy, the US has a large population, active markets, and generally stable corporate operations. The US’s domestic demand market provides a solid business foundation for listed companies.

Notable US Stock Investment Targets

As a beginner, you should prioritize companies with long-term growth potential or stable cash flow. Here are some representative options (for reference only; please consider your financial situation and risk tolerance before investing):

Tech Giants: Apple (AAPL) leads in consumer electronics; NVIDIA (NVDA) dominates AI chips and has become a tech stock star in recent years; Microsoft (MSFT) maintains a strong monopoly in operating systems and office software; Amazon (AMZN) continues to grow in cloud services and e-commerce.

Healthcare: Johnson & Johnson (JNJ) owns over 250 subsidiaries worldwide, with products sold in more than 170 countries, a leader in healthcare.

Traditional Consumer Goods: Procter & Gamble (PG) is one of the largest global consumer goods manufacturers and ranks as the tenth most admired company in Fortune 500; Walmart (WMT) is the world’s largest retailer with a stable business model; Starbucks (SBUX) has a prominent global chain brand.

Semiconductors: Intel (INTC), as the world’s largest semiconductor company, has a 52-year history of technological innovation.

International Companies: Alibaba (BABA) owns high-quality assets like Taobao, Tmall, and Alipay, with strong growth momentum.

Three Mainstream US Investment Methods Compared

Direct Purchase of US Stocks (Spot Trading)

This is the most traditional method—buying actual shares of US-listed companies. Investors own real stocks and enjoy dividends and long-term appreciation.

Advantages: Uses the T+0 trading system, allowing same-day buy and sell, with high liquidity and ease of capturing opportunities. US stock trading costs are very low, only brokerage commissions, with no additional taxes. Capital gains for US investors are tax-exempt (but dividends are subject to a 30% withholding tax).

Disadvantages: Time zone differences may require late-night monitoring. Opening a real account involves more complex procedures.

How to buy: Taiwanese investors can trade through entrusted foreign securities business, with about 1% fee. Malaysian investors can choose platforms like Malacca Securities, Moomoo, Rakuten Trade, with fees ranging from $3.8 to $25. Mainland Chinese users can trade via Futu NiuNiu, WeBull, etc.

Investing in US Stock ETFs

ETF (Exchange-Traded Fund) is a special fund traded on exchanges. US stock ETFs are diverse, including tech ETFs, healthcare ETFs, gold ETFs, bond ETFs, etc.

Advantages: Diversification reduces the risk of individual stocks. Management fees are very low; for example, VOO’s fee is only 0.04%, one-tenth of Taiwan’s ETFs. No need to pick stocks actively, suitable for lazy investors.

Disadvantages: Different ETFs within the same sector may have different investment focuses, requiring research. Trading also involves spread risk, especially within the first half-hour after market open.

How to buy: Platforms like Firstrade offer comprehensive fee-free ETF trading services.

CFD (Contract for Difference) Trading

CFD is a financial derivative that allows trading based on US stock price movements without owning the actual stocks.

Advantages: High leverage flexibility, requiring only a certain margin to open leveraged positions. T+0 mechanism supports two-way trading, both long and short, ideal for short-term trading. Offers diverse trading opportunities, including forex, gold, indices, and cryptocurrencies.

Disadvantages: Leverage amplifies risks; improper use can lead to significant losses. Caution is needed before establishing positions, assessing risk tolerance carefully.

Core Differences of the Three Methods

CFD trading is the most convenient due to its low threshold and leverage features, but high leverage also means high risk. If you have limited funds, want to increase returns through leverage, and can bear risks, CFD is a good choice; for steady growth, US stock spot and ETFs are more suitable.

Key Advice for Beginners Before Entering the Market

Investing in US stocks is not an overnight success. Successful investors need both theoretical knowledge and practical experience. Warren Buffett became a master investor because he experienced multiple financial storms and accumulated rich practical experience, enabling him to handle various market environments calmly.

Beginners should not seek quick profits. They should learn basic knowledge step by step, start practicing with demo accounts, and gradually accumulate experience. It’s also important to establish risk awareness and choose suitable investment methods based on your financial situation and risk tolerance. Combining theory and practice is the key to remaining invincible in the investment market.