Basics Of Stock Market Trading

Posted By Paul Williams on Nov 24, 2016 |

The stock exchange was once reserved only for brokers on the Wall Street. That changed with the rapid progress of computer technology, and thus the market opened up for anyone who has an internet connection. It’s possible to become rich through stock trading, but it’s also possible to lose everything you have earned in a matter of hours.

A successful trader needs to have some understanding of the theory of trading, as well as to be familiar with tools of the trade.

Every serious stock market participant needs to be able to read daily reports and understand what info they provide affects and in what way.

Choosing a right stock at just a right time

The crucial part of the trading happens before the actual buy or sell action, and that is an analysis of various stocks and choosing which one to trade. Two distinct approaches to the stock exchange exist when we consider the way traders gather info about stocks and their value and its movement.

The first school of thought uses fundamental analysis to come up with stocks whose value should increase in the future. This kind of analysis uses statements from the company (earning reports, balance sheets and so on) to calculate the state it is in. It’s quite easy to find those reports, and the most important thing is to know how to read them. Other factors that play a significant part in the fundamental analysis include market trends, the state of the economy and country of origin, media publications and so on.

The use of various indicators and charts is the basis for technical analysis, a less known and utilized approach to stock trading. The theory behind this type of analysis states that asset price follows a pattern which can be recognized and abused through various tools, including charts. This works as long as there isn’t an event that disrupts the normal movement of the price.

Both of those approaches have some good points, and it’s hard to decide which one of those to use. A new wave of traders uses the combination of those two methods to come to viable positions. This new approach seeks stocks with an excellent fundamental basis, and then they use charts to confirm the state of the asset. Once all lights turn green, a trader has a high chance of making a profit on a trade like that.

Stock exchange brokers

The first step every trader does is to pick a broker to whom they will be bound and through which they will trade. This is a significant step as it will determine the future of the trader. Every broker has a list of third-party software they will allow, and thus beginners should check what kind of software their broker will allow.
Fintech LTDis a company that offers brokerage for the stock market as well as other exchanges. They also provide software that aids in trading. Be sure to visit their webpage and check what they have. You might also want to check binary options offers they have, and that might suit you and the way you trade.