When you buy shares you buy a stake in a company. Stock trading is usually carried out over the internet. What you need to start with stock trading is money to invest, as well as a stock broker and a securities account.
To buy shares you must assign you a Stockbroker. It is relatively simple and quick process that is done over the internet.
Recommended broker: easyMarkets ffers trading in local and foreign stocks. Good analytical, frequent market reports and trading solution that works very well whether you are trading stocks, currencies, commodities or other financial products.
There are broadly two forms of stock trading
- Term stock trading
- Current stock trading
The exact definitions of what is long-term and short-term range.
The long-term stock trading can be from a few weeks to years, and you also have people who buy shares with no intention to sell at a later date.
Kortsitig stock trading is trading that lasts only a few seconds or minutes or hours, or at most two or three days, depending on how you define.
In addition, the terms " trade in the medium term ", ie a stock trading that is longer than the short-term, but with less duration than a long-term trade.
More ways to make money on stocks
There are many ways to make money in stocks, here are the essentials:
- Dividends from shares: Even if you do not sell the stock, you can make money on it if you receive dividends (dividends). The board in the limited company which decides whether to pay a dividend, and if so how big this dividend will be. Your dividend is equivalent to the percentage of fixed dividends.
- Traditional stock trading is the buying and selling of shares within a certain period of time (long-term invstering, daytrading term, medium term, etc.). When you buy a stock, you pay with cash. When you later sell the stock, you will get the money back to the person you are selling to. You can make or lose money on this sale, whichever you bought the stock for and what you got paid back when you sell. In regular stock trading upside is theoretically unlimited, while the possibility of loss is limited to the investment.
- Shorting is a way to make money on the shares fall in value. When " shorter " then selling a stock even before you buy it. This is only possible by "rent share ". You pay the landlord a fixed sum for this. When the security is repurchased ceases ownership. If you buy back at a lower gain (when the stock price has fallen) you will make money. Shorting involves greater risk than normal share trading, and in combination with shifting this is very risky. In shorting the upside is limited, while the potential for loss is unlimited and you can therefore cause you a tremendous debt.
You need to trade stocks
Before you can start with buying and selling of shares you need a VPS account, an association with a broker, and money to buy stocks.
Money to buy shares: You do not need much to try you, but under 1000 dollars is probably too small to make any significant gains, since it goes away for a little commission (fee to the broker) for each trading. To live by trading stocks, you must probably have at least 50,000 to 100,000 in start-up capital, or less if you have very low personal expenses, or more if you have greater financial obligations.
In addition, it is of course important knowledge about stock trading.
Try your hand at stock trading
Anyone who has been rich in shares, have also experienced losing money trading. It's inevitable that you lose money, but the main message is to earn more than you lose.
Forex or stock trading?
Who have been trading has started to engage with currency trading (Forex), or engaged in foreign exchange trading addition to the shares.
Currency trading has a number of advantages over stock trading:
It's better liquidity, foreign exchange is greater than the overall stock market ; cause price fluctuations are often easier to identify, and many find it more exciting to trade in the foreign exchange market.