So you want to buy stocks online? If you are new to online investing, don't put your entire life savings into an online account. Start with a smaller sum, which will be easier to handle and keep track of. Once you feel confident, you can then decide to add more money to your online account.

Many online investors tend to concentrate on stocks, specifically large domestic stocks. While these stocks should make up part of your portfolio, they shouldn't be all of it! Take into account your time horizon and risk tolerance to develop a well-balanced portfolio of stocks, bonds, and cash. Trading online is not foolproof. There will be times when you can't access your account. You could be away from your computer when the market makes a major move.

Most investors are in funds for a good reason. They don't have the expertise to make their own investments calls on individual stocks. They also are too preoccupied by work, family and other concerns to spend every minute watching the market. It is probably is an unwise move for you to cash out your long-term fund holdings so that you can start "playing the market" in individual stocks!

If you are going to do your own investing online, you need to learn how to use the tools available to avoid potentially steep losses and to buy or sell a stock at attractive prices. Here are three "orders" that you should use to your advantage:

A MARKET order is an instruction to buy or sell a specified amount of a stock (or other security) at the current market price. The advantage of a market order is you are almost always guaranteed your order will be executed - as long as there are willing buyers and sellers. Depending on your firm's commission structure, a market order may also be less expensive than a limit order.

A LIMIT order allows you to avoid buying or selling a stock at a price higher or lower than what you specify. A limit order is an order to buy or sell a security at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. By contrast, a market order only guarantees you the best available price -- not the limit order's specified price.

A STOP-LOSS order sets a sell price for a broker. When the price of the stock drops below this level, it automatically is sold. Also: Take the time to learn about "stop orders," "day orders" and "good-till-cancelled" orders.