All you want to know but never asked about the stocks and options markets.

domingo, 8 de diciembre de 2013

Introduction to Stock Trading

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In a previous article we did a review of the definition of stocks and how, through the market, we could invest in them and make profits always depending on the rise/drop of the value of the company bought. This time is the turn treat how we can make this through marketing trading.

But first things first and therefore we must begin by defining what is the stock trading. Financial trading is to buy or sell an underlying security in a financial market with the intention of obtaining a speculative profit, ie sell a security at a high price and then buy it at a low price, or buy a security at a low price and then sell at a higher price.

This activity can be done with stock indices, commodities, currencies or shares that is the case we will see.

This concept is simple to understand because we have all worked with some similar activity but on a different scale. Classes in economics, finance or accounting, for those who have studied these topics, taught us to buy low and sell high, and some of us rather learned these concepts empirically. The fact is that to trade successfully in the markets we need to know what is the "right time" to make our trades.

Make trading correctly requires patience and vision, and that in this activity we apply probability and mostly common sense to make the right decision every time we make a trade. Many beginning traders just starting, after a few weeks, have the capacity to carry out this activity and invest and earn almost immediately. In contrast for other traders is more difficult to make the right decision at the right time and that is why they often fail in their operations.

Another point to consider when trading in the market is that we can track the movement of a stock for days or weeks (long term traders) or just over periods of a few hours or minutes. Thus, we can perform our transactions depending on how the stock market has behaved in a particular hour, day or week.

To be a good trader the person must have patience, know his/her weaknesses and strengths, because the successful market trades require people who are sure of themselves and capable of make analysis of the environment and situations around them which can affect the markets.

One of the best perks of being a trader is that if you can develop a spirit of investor and analyst your possibilities are virtually endless, is a matter of security and optimism, but also you need a touch of realism and common sense. Being Trader is not easy, but the rewards that you can experience will be worth for the work you've invested.

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