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The Wild World of Stock Trading
There are many people who think that stock trading is a quick way of turning a profit. The image of stock trading also is a highly romanticized one, thanks to stock trading portrayals in the media and film. While it is true that stock trading can be a quick way to earn from an investment, it is equally just as easy to lose money from it and that is not necessarily
The truth is, stock trading is not for the faint hearted. Furthermore, more complex and adventurous stock trading moves are not for beginners or the uninitiated because trading stocks can be a very complex process. To be really adept at stock trading, you will need to have a very good understanding of the market, trends, and some years of experience to have a good grasp of how things go. It is however possible to acquire basic knowledge on the process so that you can decide if stock trading is something you want to get into.
For starters, it is important to understand that the term stock trading does not mean that you trade stocks for stocks. You will actually have to trade your money for stocks, or in short, the whole process involves buying and selling stocks. The stock market is the avenue wherein these stocks are bought and sold. The market is not an actual place; it is a network of stocks, buyers and sellers. Some stock trading is done in stock market floors or through the internet.
Now, an individual cannot directly buy or sell stocks. One will need the aid of a stock broker and pay the necessary commissions and taxes with every stock trading transaction. At this time, you may be wondering what stocks are and why are they traded. Stocks are shares from a publicly listed corporation. Stock holders acquire the benefit of being able to vote on who the board members should be as well as earning dividends from the company's profits. A more sober and safe approach to the stock market is buying stocks from a blue chip company and just earning from dividends.
This method however is not as volatile or possibly as lucrative as actively buying and trading stocks. The philosophy behind actual trading is basically to be able to buy a stock at a reasonable price and be able to sell it soon after for a profit. The profit is earned of course from the rise in stock price.
The rise and fall of stock prices and therefore choosing the right stocks to buy and sell is the tedious process. Financial and stock market analysts can help you out here. That is why it would be good to acquire a trusted and dependable stock broker who knows the ins and outs of the market and will also be able to give you advice on how and what stocks to trade.
At this point, you may be wondering how you can begin to choose a company that is publicly listed whose stocks you might want to trade with because the numbers of stocks available as well as the publicly listed companies are a lot to say the least. It would be helpful at this point to segregate the market by sector and you may want to choose one that trends indicate is about to boom or rise in value.
Needless to say, despite expert advice and analysis, stock trading carry a lot of risks and may not be the best investment choice if you are looking for something stable.
About the Author: Check out all the great stock trading tips at http://stocktrading.knowsmart.com/. Learn about the different aspects of online stock market trading.