How to trade in the Stock Market?

How to trade in the Stock Market?
Andela Novotna
Andela Novotna
Published on: 15.10.2020 17:56 (UTC)
Post reading time: 2.58 min

Stock market can be considered as the most important part of the global financial system. In contrast to currency market, trading on this market requires considerable investments. In order to trade successfully in the stock market, you need thorough professional knowledge, experience and serious capital. Before you start trading you need to get theoretical knowledge about trading in stock market and determine which method of investments is best for you:

  • Classical trading on the stock exchange involves long-term and medium-term investments in the stocks of large companies in order to get a stable income in the form of interests and dividends.
  • Online trading in the Stock Exchange gives you an opportunity to earn money quickly on the price changes. But how to trade stocks? In order to trade stocks it is necessary to turn to the services of a brokerage company, which will provide you with a trading platform and brokerage services.
  • Fund management guarantees you a stable but moderate income. This method of investment involves transfer of funds to the management of the investment company, which itself generates and manages your portfolio of stocks.

Stock Markets with the most liquid stocks

The liquidity of the stock market is provided by the large number of market participants, who simultaneously buy and sell financial instruments. High liquidity allows to buy and sell stocks without extra cost. Any exchange maintains the liquidity of the stocks with the help of market makers and well-designed tariff policy.

Actually the most highly liquid exchange is the New York Stock Exchange (NYSE), which annual turnover is around $15 trillion. It is followed by NASDAQ (New York City), Tokyo Stock Exchange, London Stock Exchange and Shanghai Stock Exchange.

More than half of the global turnover of trading on the market provide US stock markets, where not only American major investment companies and pension funds trade, but also foreign traders.

Stock Trading for Beginners: Basic Mistakes

Nowadays trading in the Stock Market is the most profitable business and is available to everyone. No other business gives an opportunity to earn money in a short period, but sometimes with the same success and the same short period of time, most traders leave their money in the market. What is the reason and how to trade in the stock market to make a profit?

Having theoretical knowledge, enthusiastic beginners start online trade with the desire to get a lot of money, ignoring the existing market trends. They do not like to wait patiently for the formation of a pronounced trend and trade according to it, so every spread for them is unexpected, which leads to the loss of funds.

Trading on the Stock Exchange without clearly elaborated strategies leads to nothing good. It is also very important to control the emotions and stop in time.

The most difficult and demanding part of trading on the Stock Market is good knowledge and great experience in order to identify the entry and exit points. Every trader fights with the temptation to continue trading when the profit grows and break a big jackpot, or to confine to small but guaranteed profit.



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