Forex Trading

Thursday, February 23, 2006

The Stock Market - Introduction

Here is a quick introduction into the stock market and online trading. This should give you enough information to get your foot in the door and start trading like a professional.

The stock market is a market used for trading company stocks. Some are sold publicly on the stock exchange, while others are sold privately. The term stock market is used to describe the device that allows people to trade stocks as well as to explain the sum of all stocks within a country.

It is different from the stock exchange, which is referring to different corporations in the business world that brings buyers and seller together.

People who participate in the stock market can be anything from small private stock investors, to large fund traders, both of who’s orders for exchange end up with a professional in the business.

A long time ago, a lot of the people involved in trading were individuals, but over time this has become rare and most traders are larger business and corporations such as insurance companies or banks. There are now stocks in most if not all developed and developing countries, including Japan, the USA, Canada, Europe, India and China.

There are different types of trading including short selling and margin buying. Short selling is when the trading borrows stocks and then sells them and hopes for the prices to fall.

Later they buy back the stock, making money if the price fell and losing if the price rose. This strategy is sometimes used by traders who are trying to lower the price of a stock and is often prohibited or restricted.

Margin buying is when a person borrows money with an interest rate and invests it in stocks and hopes for the stocks to rise. This is more common, and in most countries there are restrictions placed on the maximum percentage of the stock the traders will own.

Trading Online

Len

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