What is stock?
Stocks is a security, which indicates that you own a share in the company. It secures your right to receive regular dividends from the operations of the company.
Stocks fluctuate in price depending on how the company works and how successfully it is functioning. For example, if company A just released an amazing new product that has very good sales, company A's stock prices will rise.
On the other hand, if company A is experiencing a drop in sales, their stocks are likely to fall as well.
Advantages: if you own a large number of stocks , and the company is booming, you can receive regular high payouts. Also, at any time you can sell the company's stocks - as a rule, it is profitable to do this when their prices are at its peak.
Disadvantages: if the company does not work well, then your stocks are getting cheaper. Since stocks are not diversified, this can mean disaster for you (although you can easily reduce your risk by choosing larger and more solid companies).
How to trade stocks? There are two ways to trade stocks:
Exchange trade. This is the kind of trading that you could see in American films, in which hundreds of employees of the New York Stock Exchange shout into their handsets. This is a complex process that works as follows: you tell your broker to buy stocks from the company, the broker sends a clerk to find a trader who wants to sell you the stocks , and if the price indicated by you suits the trader, you get the stocks.
Electronic trading. In this case, the resale of stocks occurs through online brokerage platforms that allow you to immediately make transactions during trading hours. No more relying on screaming traders who pick up stocks for you.
BR Stone platform is focused on electronic stock trading, so in this article we will consider only this type of trading.
Key principles of stock trading
When you are getting started in the stock market it may seem like a serious and frightening process for most people. If you have never participated in an investment strategy that is as active and dynamic as stock trading, you will need time to get used to it. Regardless of whether you work alone or under the guidance of an experienced trader, you will need to conduct the necessary analysis to succeed.
Since stock trading has gone online, now anyone can easily control their own investments and not give money to the broker so that he does it for them. However, as an online investor, you will also have to think about more complex tasks, including the need to more carefully examine each of your stocks. Of course, if you can overcome these difficulties and trade online as efficiently as possible, you can also make big profits. The level of your success will completely depend on how correctly you set yourself the initial financial goal before you started trading stocks.
Why do you need a financial goal
Before you start investing, you must set a financial goal by answering the question why you need it.
A good way to come up with an investment goal is to ask yourself why you are investing. Want to increase your savings? Trying to make money for a big purchase in the future? Do you just want to support any company/business in which you invest?
You may have such a specific goal as "I want to earn $ 20,000 in two years to spend on a new car." Such specifics will help you determine in the process of work, what amounts you need to invest in order to achieve your goal.
Since everyone can now trade stocks, and for this it is not necessary to have a trusted broker - your success is completely up to you. If you want to trade, do it slowly, based on knowledge and understanding that we are ready to provide you at BR Stone.