Trading stocks has never been easier or more affordable than it is today. Thanks to the rise of online brokerages, individual investors can buy and sell thousands of shares a day with the click of a mouse, and generally less than $10 a trade. The trading floor is no longer just the domain of Wall Street, and with a few simple tips you can start trading online today.
Before you can start making money through trading stocks, or potentially losing it, you should become familiar with the basics of the market. At its simplest the market simply functions on the basic premise of supply and demand. The more investors interested in an individual stock, the higher that stock price will rise. The same is true on the other side of the trade, if more investors are looking to sell their shares in that stock, it will drive the price down.fxtrade777 While stock prices can change for many reasons, generally it is based on the underlying fundamentals of the company behind those shares.
There are two main approaches to choosing stocks, each very different from the other. These are called fundamental analysis, and technical analysis. Fundamental analysis looks at the underlying health of the company being traded. Things like whether or not they are profitable, projected revenue growth, earnings per share, and leadership all play into the underlying strength of that company. Fundamental investors choose stocks in companies they believe have strong fundamentals that will indicate future growth.
Technical analysis ignores the underlying strength of the company, and simply looks at it’s trading history and price patterns. Technical traders may look for certain price levels that indicate either a rapid rise or rapid fall when reached. They generally are not buy and hold type of investors, instead looking to …