Stock Trading Basics

If you have money in hand, you will be confused and wondering what should I invest in and what are the good companies to invest in? This has been an issue with many of the people and in a hurry people take wrong decisions to invest their money. Finally they end up in losing all the money which they invested and hence it is very important to know all the things deeply before investing your hard earned money. We really get scared to invest our money because it involves a lot of risk. There might be scams and many fraud things happening around.

What should I invest in?

This is a very good question to ask yourself when you have saved enough money to invest into something and get good returns. There requires a lot of risk when you invest into something and you might be even scared that what if you lose all the money? Then the best place for you to invest is a bank account. But the disadvantage is that there will be less interest rates and the rewards or returns it depends on the money you put into the account. Next way is to put your money in stock market but you need to know about the stock market basics as well as the good companies to invest in so that you will be little safe. There are many people who invest their money in stock market and get huge profits. It completely depends on the market value but note that it involves the highest risk. Make a thorough research in this field with the help of internet or from the people you know. They are many sources to make your money grow but it depends on how far you take the risk. If you put your money somewhere which involves a lot of stress, tension and worry, then it is better that you exit from it and choose a point where you feel comfortable as well as get good returns.

Stock trading basics?

Trading in stock can be often confusing because there will be a lot of theories and actions. For few people stock trading makes a lot of sense and it comes into understanding to them very naturally and this is why they will be able to take up right decisions. Basically, you need to know first as to what stocks are! Stock is a way through which a company makes investment capital. The company will trade shares for its profits. Both the company as well as a stockholder gets benefits with this transaction. Generally there are 2 methods for stock trading which are as follows:

  1. Floor exchange
  2. Electronic exchange

Even though there is a huge push to build everything electronic, the floor trading is the most popularly used. The floor exchange works in this way, imagine you ring up to your broker asking him to get you 100 shares and then the broker rings to a floor clerk, who already knows that who is ready to sell 100 shares. Then the company and the broker both agree for a price and this price will be later communicated with a mail confirmation. Finally you can get your shares. The electronic exchange also works in a similar manner but the difference is that the sellers as well as buyers will be communicating online for instant work. The electronic broker gives you more facilities when compared to floor broker. Even though it’s online, you still need a broker because not all the people have access to the American economy. This is a good way to invest your money but make sure you understand everything first.

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