What is Stock Trading?

Forex Graph

In recent years with the emergence of online trading platforms the financial markets have become widely accessible to individual, or retail, traders. As that has been attracting more and more people, brokers have started developing and introducing new instruments and solutions to make trading easier and more exciting as well as open to a wider range of traders.

As the most popular of these alternatives is trading stocks and shares, here we will explore in-depth what stock trading is and why it is so popular. The appeal of stock trading is mostly due to it’s simplicity and the fact that it allow even beginners to learn how to trade much quicker in comparison to other financial instruments. With traditional investment methods you buy assets and you can make a profit if you sell them when hopefully their price increases.

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How to Trade Stock and Shares?

Stock trading is much simpler as you don’t buy the assets themselves but invest in predictions about the price movements of stocks and shares. For example, if you predict that the price of a certain asset will increase and then it does, the trade is considered to be successful and you will achieve results, determined at the beginning of the trade.

However if you fail to predict the change in price correctly, you will lose the investment you made for this particular trade. This “all or nothing” approach limits some of the risks associated with traditional financial trading and as traders know in advance exactly how much they could win or lose, it allows them to make informed decisions and choose the strategies, which will enable them to achieve optimal results.

Trading for Beginners

Another advantage of trading stocks and shares that attracts many traders is the wide range of expiry times, varying from 30 seconds to months or even a year. The Short Term trades, the most popular of which is the 60 seconds trade, offer an especially dynamic and exciting trading experience as well as more chances for success because traders can open more positions within a certain timeframe.

For those who are more patient and prefer a laid back trading experience there are Long Term trades with longer expiry times of up to 1 year. After you select an asset, a type of option and an expiry time, you can open a position and if it ends good you will win. As the trading process is very simple, it is not necessary to have a degree in finance or economics to be able to trade successfully. Even beginners can quickly master trading without spending long hours in front of the computer analyzing complex charts and graphs and studying companies’ financial reports.

Therefore stocks and shares presents a good starting point to gradually learn how to trade more advanced options. This is further facilitated by the various types of available trading solutions such as online trading systems and social trading networks. Traders can choose the kind of platform that would be best suited for their trading style, different trading tools, trading strategies and would enable them to maximize their ROI.

How to Start Trading?

One of the most important things traders have to do, when they decide to go into trading stocks and shares, is to choose a good broker. With the increasing popularity of stocks and shares, new brokers constantly emerge on the market and traders face the risk of coming across fraudulent practices and scams.

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Therefore it is recommended to sign up with a regulated broker as they are licensed and supervised by the relevant financial authorities. Regulated brokers operate in compliance with strict laws and regulations and are held up to the high standards required of financial service providers. This ensures a safe and secure trading experience and should you encounter any problems, you could file a complaint and get assistance from the competent government agency. That’s why it is advisable to do some research before you open an account with a broker and make sure they are regulated.

Another essential thing you must consider is whether the broker provides a Demo Account and Demo Trading. The practice accounts give traders the opportunity to test the broker’s trading platform, try out its features and see if it meets their requirements.

Also, this will allow you to make sure that the services and trading conditions correspond to what is advertised on the broker’s website. The access to a Demo Account is very important for novices as it enables them to learn the basics of trading stocks and shares and practice in a risk free environment until they gain some experience and feel confident enough to start with real investments. However, demo accounts are also very useful to advanced traders as well, because that allows them to try out different strategies in practice mode without the risk of losing inestments.

Trade Stocks and Shares

As it doesn’t require any prior knowledge in the field of finance or economics, even novices can quickly get up to speed with the online trading process. However, seasoned traders can also benefit from stocks and shares as they offer the opportunity for potential success in a relatively short amount of time. Last but not least, the low initial investment required for trading stocks enables everyone to participate on the market regardless of their financial situation.

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