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Online Stock Market Trading – Stock Trading Basics

There is an image that comes to people’s minds when stock trading is mentioned. An enormous floor with men in business suits yelling and gesturing. There seems to be no rhyme or reason to their shouting. This is an idealized movie version of the New York Stock Exchange. In fact, stock trading is a complicated process that keeps businesses in operation and investors earning money.

The foundation of stock trading is that of companies offering shares in their business for purchase and sale. Investors that buy the shares receive a proportionate ownership in the company. How well a business does on the market determines how much profit an investor earns.

There are two different systems for access to the stock market. The first is on an exchange floor where buying and selling shares is executed through traditional means. The second is through the Internet stock market sites.

Exchange Floor Trading

The exchange floor, although not exactly as portrayed in the movies, has thousands of brokers who negotiate trades for their clients, the investors.

There is a procedure that is followed by the brokers for uncomplicated trades. The investor contacts a broker’s office and places an order for a specified amount of stocks in a certain company. The broker’s order department then provides the order information to a floor clerk located on the exchange floor. The clerk relays the information to the floor traders. The floor traders meet with other traders who have investors with shares that they are willing to sell in the requested companies. Once both parties’ traders have agreed upon the price they close the deal. The final details are provided by the reverse process to the broker, who informs the investor of the finalized details.

Negotiations between traders depend on the status of the market and how well the shares are performing. The bargaining can take anywhere from just a few minutes to longer. If the order is large or complex, the foundation of trading remains the same but there may be more complicated procedures to follow.

Electronic Trading

Computers and technology are ushering in a new trend in trading stocks. The National Association of Securities Dealers Automated Quotations trades stocks wholly through advanced online systems.

Traditional stockbrokers are dispensed with by online stock markets. Computers instead pair up buyers and sellers. Transactions executed in this matter are quicker and more effectual.

Electronic trading also provides the investor with expedited confirmations. Investors have the benefit of monitoring the investments through the Internet. Brokers still complete the trades however, as online stock markets are not directly accessible by investors.

The only part of the process an investor usually is involved in is their contact with their broker and receipt of regular reports. The remainder of the trading mechanism is carried out without any direct interaction from the investor.

The theory behind stock trading is actually quite simple. Investors purchase shares in businesses through stocks in order that those businesses can continue operations. The investors earn a share of the business’s earnings in return. It is a process that benefits both parties.

How to Be Successful in the Stock Market

Stock Market- a lot of speculation, a market to dream, see them shattered and still keep dreaming; a place where you fulfill your dreams or call it a gamble… what you want to view it as is really your choice!!

Today’s vision is to earn as much money as possible and get as much returns with an intelligent investment plan. With the boom in the emerging markets and the advent of the Internet and computers, investment in stocks is indeed a lucrative option. And with stock trading systems such as online trading, a lot of toil and money is saved if one wants to invest in the stock market.

The market scenario is rather volatile with the emerging markets playing a significant role in them now. So, to earn the maximum amount of returns from your investment, what is absolutely essential on your part is to get a decent knowledge of the company’s portfolio in which you invest. Besides this, when you do hire an online broker, remember to check the records from other clients of your broker. However, online stock brokers offer consultancy services at cheaper rates because they guide investors through a number of investing options and help them choose the best, whereby they can earn higher returns.

Online stock market trading offers an almost clear picture about the present market scenario because the unscrupulous middlemen are absent. Being your own master, you can carry out online stock market trading as your time permits. This has another advantage- while trading these stocks; you can follow the swings that the market has to offer and decide for yourself which are the weaker stocks that you want to trade away for healthy investment in the market. The advent of new trading systems along with the brokerage companies ensure to the investor that long term trading is also possible online besides day trading. A host of banking options with e-broking accounts facilitates these transactions without hassles.

In general, a financial consultant managing your funds between bonds, mutual funds and the share market, will advice you to keep your investment in stock markets for a long time- say a minimum of two years. This reduces the risks, as the effects of market volatility do not affect the price of the stocks in general. Since the trading indices always show an upward trend over a long period of time, the chances of earning a decent return is also pretty high. However, if you go for day trading, you can earn quite a bit of quick money by monitoring the market movements and trade a stock quite a few times in a day. This requires one to have a fair idea of the circumstances beyond the company’s control that can affect the stock prices.

Having glorified the online trading system, it should be noted that online trading of stocks could lead to various unwanted scams that a successful stock investor should be aware of. So, try staying away from programs that promise of doubling or tripling your returns!

A successful trader is one who can balance his portfolio of risks and returns well and this of course needs a lot of research!

Stock Market Explained – A Guide to Understanding What a Stock Market Really Is

The stock market is any exchange or location where shares are bought or sold. Every share is electronically bought and sold on a particular stock exchange.

For example, in the United States there are different major stock market exchanges. There is the NYSE, and the NASDAQ .
Every company that has shares of stocks, trades on a particular exchange, but not on the other.

Basically if you’re looking for a simple definition of the stock market it is a place where stocks are bought and sold, each stock generally belongs to a particular market and does not trade on any other exchange.

Every separate stock market is responsible for recording how many shares of a particular company have sold, the price it has sold at, as well as giving other real time quotes and statistics about every thing that trades at its stock market exchange.

For example the NYSE is only responsible for the statistics of the stocks that trade on the its trading floor. It is not responsible for any statistics that happen on the Nasdaq per se. Each exchange trading floor is proprietary and is responsible only for the stocks that are traded on its floor.

One of the things that stock markets must do, is they must provide the statistics of all the shares that trade on their particular exchange. They must provide the volume, bid and ask price of each share, the opening price, the closing price, as well as any after hours movement that happens and also the early morning trading session movement or the pre market session as it is sometimes called.