Everyone strives to get rich as quickly and easily as possible. In particular, such sentiments embrace society at times when there are new types of earnings that create impressions of the lungs. This opinion in the society is about, for example, work in the stock market.
The myth of the ease of earnings in the stock market
As a rule, citizens of post-Soviet States do not think of the stock market as a place where you really need to work. The vast majority of residents consider the stock market a place where capital is growing by leaps and bounds, without forcing the owner of the funds to make a noticeable effort.
And yet, in order for the invested funds to demonstrate growth, it is necessary to “invest” in the stock market not only money but also a lot of time and effort. The trader will need constant analysis of the market situation, the analysis of a variety of reports, the ability and effort in predicting exchange rate movements. If you want to try yourself, we can help you with writing a cv letter . The participant of this market will have to spend enormous periods of time to get acquainted with professional literature on the topic and a lot more.
If the trader still decided to start working on the stock market, but is not interested in the nuances set out above, it will be useful to read the next section of this article, which tells about the basic concepts, which should always be remembered, and which sets out a number of useful tips for beginners.
The essence of the trader in the stock market
The essence of trading in the stock market is the turnover of securities: shares, bonds and other documents that are endowed with market value. It is most simple to study the specifics of the stock market, considering as an example the share.
As soon as a certain company in its development reaches a certain level, it has a need to attract additional funds to its budget. At the very beginning of such funds can provide investors. But in the future, when a well-defined “bar” in financial development is achieved, private investors will no longer be able to provide the necessary amounts of financing that are required for the continued development of the company.
Most often in such cases, the management of the organization decides to proceed with the procedure of placement of shares. The owner of the shares receives a small percentage of the profit from the income of the company to which the shares are issued. Income from the share, in the classical sense, and is based on the payment of dividends to its owner. But stock market participants practice a slightly different type of handling of securities.
Depending on how successful the company is in its development, the price of its shares either increases or decreases. The rate of shares is directly dependent on the success of the company’s policy on the world market. As market players prefer to hold shares of companies that are actively developing, such shares are rising in price in the secondary market. If the company makes mistakes-there is a drop in the rate.
In addition, changes in supply and demand can cause a slight fluctuation in the value of the stock. With the active sales of shares of any company capital market participants, their cost is reduced, and Vice versa — if the shares of any company being bought EN masse, their price is increasing rapidly. On such fluctuations and make the traders your earnings.
For example, you can imagine a situation in which, for the share of a certain company at the start of the trading day offered an amount of 10 USD. But at the end of the day, for whatever reason, the rate of this share rose to 10.1 USD. It is quite logical to assume that when buying a share for $ 10, and then selling it at a price of $ 10.1, the trader will receive a profit equal to 10 cents. This, of course not many. But if such an operation was carried out with 1000 shares, the profit will look much more impressive.
A few tips for beginners
Now, when traders generally understand the essence of trading in the stock market, you need to look at the subtleties that this work will have to take into account.
Initial. Do not think that the stock market can start small. This is not the same as trading in the Forex market, it will not work to start with $ 100 and earn decent money. In the stock market, the trader will need quite large investments.
Second. Risks need to be weighed very carefully: there is no need to open positions on securities that are subject to systematic and sharp fluctuations in the rate. In the stock market, the more profitable the stock, the more smoothly it changes course, the lower it’s volatility.
Third. Do not simultaneously conclude a large number of transactions. It is better to analyze stock market reports, how to analyze the risks and strike a “pinpoint strike”.
The main commandment of the stock trader-do does not forget to constantly learn. It is not necessary to regard the above information as a guide, or a guide to trading in the stock market. This is only the most General concept of the work of such a complex organism as the stock market. A trader can only independently learn the necessary subtleties in various ways — from learning to trade through reading literature, to attending special courses.
