Nov 17, 2013
Investing in stocks can prove to be very risky. This is because if you invest in the wrong assets you could lose all you initial capital, or gain double you initial investment. Trading stocks is quite a gamble, there are risks that come with it, and so before you invest through stock, one must be properly aware of how to stock market works and the basics of trading stocks.
Stocks represent an asset, which represent a share in the ownership of the company. When an investor acquires a share of a company, they basically own a portion of that company.
Most stocks are traded on exchange, buyers and sellers meet at a market place, which usually does not have a physical address, and needless to say it is a virtual place. This is what they call the stock market.
What is the stock market?
A stock market is a market where stocks are exchanged. In the stock market shares are bought and sold, this is where traders interact and compete to obtain a upper hand in acquiring an asset. If an investor wants to buy a share from a company the first place they should look would be at the stock market. Regardless of how much money you have, doing proper research on the stock market is recommended in order not to lose your initial capital. The idea of investing is to make money in the long run not to lose money, so wise decisions would have to taken to keep that up to par.
How to trade stocks?
There are different ways in which an investor can acquire stocks. The easiest way on how to trade stocks is to have someone do it for you or go through a professional when buying, hence to say to go through a broker. Most wealthy people do not have the time and do not want to bother with having to check on the stock market on an hourly basis. This is one of the reasons why they hire a professional broker to do the hard work for them.
There are quite a number of brokers, you just have to find the one that appeals to you the most, brokers do not only trade for you, they also help with giving advice on how to handle your investment.
For those who would like to do it their selves, there are numerous websites, which offer the services to trade online. In this case the investor will be acting as their own personal broker. These are just the two basic ways in which you can attain stocks; there are also other conventional ways in which investors can incest. You would just have to choose what suits you the most.
Once you determine the most suitable way to trade, the investor just has to monitor the stock market and take advantage of the fluctuations, which may arise. Gains are made from stocks buy exchanging them, basically buying them at a very cheap price, wait till when it has value then sell it right back to the market.
Originally posted here –