Do you also wonder what trading is? And why has it gained serious popularity? The flow of money has been ever-changing with the innovation in creating, authenticating and tracking every penny.
The evolution of the same in today's date leads us to trade and trading terms. Making money and gaining profits is becoming more effortless, but the effort one needs to make to fetch big bucks is to lay a strong foundation of knowledge about the trading world.
But first, let us know what is trading in stocks.
Stock trading involves buying and selling of shares in a certain company. If you own certain stocks and shares of a company, it translates to you owning a piece of the firm.
A professional or an individual who trades on behalf of a financial firm will be known as a stock trader.
One needs to be well-informed about the field's jargon to ace the trade game in the long run and be at the top of the market. Let us gain some depth of the concept through words that would enhance your trading knowledge.
The common terms used in trading :
Equity can be referred to as the number of shares owned by a company. When an individual investor buys a certain share of the company, it is said to be equivalent to the degree of ownership in that company.
The Stock market is the stage where the company shares EQUITY are bought and sold from one investor to another.
Bull Market and Bear Market are the two terms that indicate the current trend that the stock market witnesses at a given time. The bull market refers to the timeline wherein the stock prices rocket up and hence see increasing growth taking the market to an upward trend.
Referring to the bear market, it’s the period that signifies the decline of stocks, thus the failing downward trend of the market.
Every investment is made on the motive of returns and profit, which can also be described as Yield. Yield catches the investors' eye, that is, return on investment, which is to be expressed based on percentage. Every investor aims for a high-yielding percentage as it would also impact their portfolio in the long run.
Every trade needs a platform and a medium to transact and track the buying and selling. Trading Account is the base for all stock market transactions. The participants must open an online trading account with an authentic registered broker to perform trades. All trade activities are to take place through the individual's trading account.
Now and then, we can see a high, medium, or low range of price fluctuations based on demand in the market. This movement of the graph is known to be volatile. It is the traders' skill to churn the best out of this scenario.
Risk is the key element which at times, can lead your path to high profits and, at other times, can downsize the outcome, which comes with major learnings and turns out profitable in the longer run. Some traders profit off the risks involved in highly volatile stocks, while others prefer investing in less volatile stocks for the long run.
With these common stock market and trading terms, one can begin their journey into stock market investing. All it takes is efficient potential research to identify multiple stock market offers. To begin with, open a Demat account, as it’s mandatory with a reliable brokerage firm and start investing.
Trading in stocks
Stock trading revolves around the buying and selling of stocks. The stock market is an accumulation of various stocks of companies and commodities listed on specific exchanges. The exchanges track supply and demand.
There are numerous stock marketing courses and a wide range of sources one can refer to expand their knowledge base in this marketing industry.
But as it is always suggested, “Experience talks” the tycoons engaged in the business for years are the best visioners. Trading is an art to be learned over time over the foundation of mistakes and learnings.
There are many ways an investor can participate in the trading of the stock market, but the major two are
Active trading is where an investor places 10 or more trades per month. This method is highly based on the timing of the market. Short-term events are the time pockets that need to be targeted in order to gain high profits.
On the other hand, Day trading is the hot potato of stocks — it focuses on buying and selling the same stock in a single trading day.
Day traders care little about the inner workings of the businesses. They try to make a few bucks in the next few minutes, hours, or days based on daily price swings.
The graph above projects the criteria of the candle according to which the traders can foresee the return on investments and make profitable decisions.
Stock market and trading are always subjected to market risks. Hence it's always suggested to be cautious while making transactions.
Keeping a continuous eye is always essential to be on the tip of the movements in the market. It has become more
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