Stock trading is carried out by stock traders who for the most part need an intermediate such as a brokerage firm or bank to carry out the trades. Stock traders work for themselves by investing money in shares which they believe will increase in value over time and then sell the shares at a later date for profit.
There are a number of strategies used by stock traders in order to accumulate profit. The most popular stock trading strategies are day trading, swing trading, value investing and growth trading. A brief description of each of these strategies will now be given
* Day trading is a form of trading in which stocks are sold and bought during a single day so that at the end of the day there is no change in the number of shares held. This is done by selling a share each time another share of equivalent value is bought. The profit or loss comes from the difference between the sale price and the purchasing price of the share. The motivation behind day trading is to avoid any overnight shocks that might occur on stock markets. All stocks are held for a very short time period
* Swing traders hold stocks over a medium time period, say a couple of days or 1 or 2 weeks. Swing traders usually trade with stocks that are actively traded. These stocks swing between a very general high and low extreme. Swing traders must therefore purchase stocks at the low end of their value and then sell the shares when they swing back up.
* Value investing is a method of stock trading in which traders purchase shares in a company which they consider to have under-priced shares. The hope is that by investing in the company the shares will eventually increase in value.
* Growth investing is a method of investing in companies that are showing signs of above average growth. The share price may be more expensive than what it would be expected to be however the view of the trader is that the share value will grow into what it has been purchased for.
Stock trading does come at a cost however. The high levels of risk and uncertainty as well as the complex nature of stock trading is enough to deter most people from becoming stock traders. There is also the brokerage fee charged by the bank or the brokerage firm every time a transaction is carried out. However all this aside there is still a considerable chance of getting lucky as a stock trader which is enough to supply the stock trading industry for the foreseeable future.
Stock Trading Strategies - Do You Know These Simple Yet Highly Profitable Strategies For Trading Stocks?
Stock trading is carried out by stock traders who for the most part need an intermediate such as a brokerage firm or bank to carry out the trades. Stock traders work for themselves by investing money in shares which they believe will increase in value over time and then sell the shares at a later date for profit.
There are a number of strategies used by stock traders in order to accumulate profit. The most popular stock trading strategies are day trading, swing trading, value investing and growth trading. A brief description of each of these strategies will now be given
* Day trading is a form of trading in which stocks are sold and bought during a single day so that at the end of the day there is no change in the number of shares held. This is done by selling a share each time another share of equivalent value is bought. The profit or loss comes from the difference between the sale price and the purchasing price of the share. The motivation behind day trading is to avoid any overnight shocks that might occur on stock markets. All stocks are held for a very short time period
* Swing traders hold stocks over a medium time period, say a couple of days or 1 or 2 weeks. Swing traders usually trade with stocks that are actively traded. These stocks swing between a very general high and low extreme. Swing traders must therefore purchase stocks at the low end of their value and then sell the shares when they swing back up.
* Value investing is a method of stock trading in which traders purchase shares in a company which they consider to have under-priced shares. The hope is that by investing in the company the shares will eventually increase in value.
* Growth investing is a method of investing in companies that are showing signs of above average growth. The share price may be more expensive than what it would be expected to be however the view of the trader is that the share value will grow into what it has been purchased for.
Stock trading does come at a cost however. The high levels of risk and uncertainty as well as the complex nature of stock trading is enough to deter most people from becoming stock traders. There is also the brokerage fee charged by the bank or the brokerage firm every time a transaction is carried out.
However all this aside there is still a considerable chance of getting lucky as a stock trader which is enough to supply the stock trading industry for the foreseeable future.
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