People hear about the stock market every day. Each time the stock market hits a high, or a low, people hear about them. Daily statements are also issued about the activities of the stock market and its relevant economic implications. But what really is a stock market? What are stocks? And why is it that people want to do stock market investments?
The stock market is the marketplace where the trading of company stocks happen. These stocks may either be the securities which are listed on the stock exchange or those which are traded in a private manner. Stock market investments allow companies and private individuals to get a share of ownership in large corporations. It is also a way of gathering large sums of investment capital which is difficult to produce if the business is solely-owned. The large capital then comes from the stock market investments.
Stocks are shares of a company or business which gets on sale in the stock market. Stock market investment happens when a person buys a share of a company's stocks that were put on sale in the stock market. For example, a businessman decides to sell his business in the stock market. Each stock market investment is represented by the person who buys his share of stocks. When this happens, any person who buys stocks in the businessman's company will have an equal share of profits by the end of the year, and an equal vote in the company's business decisions.
In the past, stock market investments were done by individual buyers and sellers. Through time, however, this has changed and the market participants evolved from individual investors to large corporations. This change in the activities of stock market investment has also helped to control movements in the market.
To encourage stock market investments, a business that wishes to sell its stocks to individuals and corporations could only do so if it becomes a corporation. Individual capital investors and big corporations who buy a number of shares of a business or a corporation are then called shareholders. Shareholders are the owners of the new incorporated business. Their stock market investments gave them the authority to claim ownership of the business. These people can now decide whether to privately or publicly hold their corporation.
In a privately held company, the shareholders are few and probably know one another. Their stock market investments are known to each other. The publicly held company, however, is owned by a large number of people who do stock market investments on the public stock exchange.
Tuesday, December 29, 2009
How to avoid mistakes when investing in shares
The promise of making a lot of money has been heard by many, and many have found out that it just is not as easy as they had heard. They lost money - sometimes a lot of it. They then turned away from the stock market and ended up totally disillusioned about it. The truth is, they may have been somewhat confused about it in the first place. They may have thought it would come to them just like it did to others - without knowing the why's or the how's. Here are some strategies that you can use in order to help you to avoid the common mistakes that others have made.
Get A Realistic View
By looking at the market with your eyes open, you can come to understand not only the profit possibilities, but also the possibility of losses. The truth is that the higher the possible gain there is, that it is always associated with the increased likelihood of loss. The safer investments always bring a lower level of profit, and the safest investments have attached to them the lowest levels of profit.
Understand The Market
One of the greatest benefits that you can have to help you avoid a lot of potential pitfalls in your investments is to understand the principles of investing. In other words, read all you can about the process, how to judge a good stock, etc. The more you know about it yourself, the wiser you will be able to invest your funds - and hopefully see a profit. You will also be able to develop a worthwhile investment strategy - both for the short term and for the long term.
Diversify
It is smart investing to place your available investment funds into a minimum of 6 different kinds of shares. Some suggest that you go as many as 20 in order to diversify safely. Spread your investments into different kinds of stock (sectors) that are not related. This way if one type of market does not do well, then the other ones should. This enables you to still make money from some of your investment.
It is usually a good idea to diversify into more than just the stock market - at least until you really understand what you are doing. The smart investor will take a portion of their investment money and put a percentage of it into secure investments like trust funds which are solid investments, and possibly also bonds, which are the most secure, but do provide less interest.
Seek Counsel From Professionals
Unless you have money to just throw away, it would be a real good idea to seek help from someone who understands the market better than you do. There are professionals out there, financial advisers, brokers, etc., that are more than willing to help you build a solid portfolio for your investments. Their expertise can spare you a lot of unnecessary loss, and get you on to the right track to some solid profit.
Make Your Investments For The Long Term
While there is different thinking about the markets and how to invest, the general idea is to make your investments for the long term. Experienced stock market experts tend not to watch the market everyday, but only check on it once a month and many of them only quarterly. Watching it everyday leads to a lot of anxiety - since the market normally fluctuates a lot from day to day. Overall though, it generally moves upward.
Get A Realistic View
By looking at the market with your eyes open, you can come to understand not only the profit possibilities, but also the possibility of losses. The truth is that the higher the possible gain there is, that it is always associated with the increased likelihood of loss. The safer investments always bring a lower level of profit, and the safest investments have attached to them the lowest levels of profit.
Understand The Market
One of the greatest benefits that you can have to help you avoid a lot of potential pitfalls in your investments is to understand the principles of investing. In other words, read all you can about the process, how to judge a good stock, etc. The more you know about it yourself, the wiser you will be able to invest your funds - and hopefully see a profit. You will also be able to develop a worthwhile investment strategy - both for the short term and for the long term.
Diversify
It is smart investing to place your available investment funds into a minimum of 6 different kinds of shares. Some suggest that you go as many as 20 in order to diversify safely. Spread your investments into different kinds of stock (sectors) that are not related. This way if one type of market does not do well, then the other ones should. This enables you to still make money from some of your investment.
It is usually a good idea to diversify into more than just the stock market - at least until you really understand what you are doing. The smart investor will take a portion of their investment money and put a percentage of it into secure investments like trust funds which are solid investments, and possibly also bonds, which are the most secure, but do provide less interest.
Seek Counsel From Professionals
Unless you have money to just throw away, it would be a real good idea to seek help from someone who understands the market better than you do. There are professionals out there, financial advisers, brokers, etc., that are more than willing to help you build a solid portfolio for your investments. Their expertise can spare you a lot of unnecessary loss, and get you on to the right track to some solid profit.
Make Your Investments For The Long Term
While there is different thinking about the markets and how to invest, the general idea is to make your investments for the long term. Experienced stock market experts tend not to watch the market everyday, but only check on it once a month and many of them only quarterly. Watching it everyday leads to a lot of anxiety - since the market normally fluctuates a lot from day to day. Overall though, it generally moves upward.
Saturday, December 26, 2009
Basic knowledge of forex
The purpose of this article is to add our knowledge, preparations before we enter the Forex world which is very dynamic and volatile.
Let's start with four basic foundations that we need before we enter forex.
Forex trading is not a way to make us rich
Time needed to study the science of Forex trading, a successful trader don't come up with a formula in one single night. What is needed are: Practice + Patience + Persistent = Profit
Only take one or two pairs of currency
It will be complicated if we take up the four main currency because we will have difficulties controlling it.
Watch for Forex News and Forex analysis
Although forex system is based on chart analysis, we must also pay attention to the latest news that will affect price. Knowing exactly whether it's support or resistant, and analysis whether a news can drive the price to support or persistant.
Only use techniques that you master
Make it habit to use only one method you master in playing forex. Before mastering other techniques it is better to understand and master fully one forex trading method.
Also remember that once we enter the forex, we must have a good strategy. Putting stop loss in every trade because every trader have a certain level of tolerance in losses that he could take and depend on the capital that one has.
* Try virtual trading before going to the real world
* Trading is what you see not what you think
* Win or lose is common things, the most important things are trading formula and discipline.
* 90% failed because they are indiscipline, 10% then broke.
* Money management is very important, taking up a lots of gain must be put out of your head.
The advice is to use money that won't affect our financial if we lose it. Prepare ourselves the best before entering the market. Do not underestimate something because it looks easy. Buy in low price, sell it on its top then we'll get profit from it and profit that we might not get in other business. It's very sweet but 90% traders failed and 10% of them broke.
Slowly but sure. This kind of mental is had to find in traders' mind. They all want big profits but what the get is only the other way. Don't always follow your passion, remember always to buy at low price and sell it while it's on its top.
Let's start with four basic foundations that we need before we enter forex.
Forex trading is not a way to make us rich
Time needed to study the science of Forex trading, a successful trader don't come up with a formula in one single night. What is needed are: Practice + Patience + Persistent = Profit
Only take one or two pairs of currency
It will be complicated if we take up the four main currency because we will have difficulties controlling it.
Watch for Forex News and Forex analysis
Although forex system is based on chart analysis, we must also pay attention to the latest news that will affect price. Knowing exactly whether it's support or resistant, and analysis whether a news can drive the price to support or persistant.
Only use techniques that you master
Make it habit to use only one method you master in playing forex. Before mastering other techniques it is better to understand and master fully one forex trading method.
Also remember that once we enter the forex, we must have a good strategy. Putting stop loss in every trade because every trader have a certain level of tolerance in losses that he could take and depend on the capital that one has.
* Try virtual trading before going to the real world
* Trading is what you see not what you think
* Win or lose is common things, the most important things are trading formula and discipline.
* 90% failed because they are indiscipline, 10% then broke.
* Money management is very important, taking up a lots of gain must be put out of your head.
The advice is to use money that won't affect our financial if we lose it. Prepare ourselves the best before entering the market. Do not underestimate something because it looks easy. Buy in low price, sell it on its top then we'll get profit from it and profit that we might not get in other business. It's very sweet but 90% traders failed and 10% of them broke.
Slowly but sure. This kind of mental is had to find in traders' mind. They all want big profits but what the get is only the other way. Don't always follow your passion, remember always to buy at low price and sell it while it's on its top.
how to understand forex
The forex market exists when one currency is exchanged for another. It is the bigest market in the world, in terms of money traded and also includes trading between the central banks, big banks, currency speculators (like you), multinational governments, corporations, and many other players.
The trading in the forex market across the globe currently reaches almost $2 trillion/day . Currency speculators are a small part of this market, but by learning how to buy and sell currencies while at the same time protecting your money, you will be developing a very profitable skill. However, like with any new endeavour, before trading currencies an investor should learn the basic terminology of the FOREX market.
1. Currency pricesFactors such as economic and political conditions deeply affect currency prices. Political stability, inflation, and interest rates are all factored into the price of any currency. The price of currency can be controlled by governments who flood the market or buy extensively.
2. Volume of FOREXNo force can have dominate the market due to the volume of Forex. Market forces will prevail in the long run, making FOREX one of the most open and fair investment opportunities available.
3. World CurrencyEach world currency is given a three letter code which is used in FOREX quotes. The most common currencies are USD (US dollars), EUR (European euros), GBP (United Kingdom pounds), AUD (Australian dollars), JPY (Japanese yen), CHF(Swiss francs) and CAD (Canadian dollars).
4. Foreign exchange pricesEvery foreign exchange transaction involves buying one currency and simultaneously selling another so reading a foreign exchange quote may be a bit confusing at first but it gets simpler if you keep in mind that the first currency listed first is the base currency and that the value of the base currency is always 1.Forex quotes can be used to determine prices of foreign exchange. The first currency is the 'base' and the second is the 'quote' currency. In this example: USD/EUR = 0.8419 the currency pair is US dollars and European euros.
The base currency (USD) is always at '1' and the quote currency shows how much it costs to buy one unit of the base currency. In this example, 1 US dollar costs 0.8419 euros. Conversely EUR/USD = 1.1882 tells us that it costs 1.1882 US dollars to buy 1 euro. When the price of the quote currency goes up it indicates that the base currency is becoming stronger one unit of the base currency will buy more of the quote currency. The base currency is made weaker when the quote currency is weak.
The trading in the forex market across the globe currently reaches almost $2 trillion/day . Currency speculators are a small part of this market, but by learning how to buy and sell currencies while at the same time protecting your money, you will be developing a very profitable skill. However, like with any new endeavour, before trading currencies an investor should learn the basic terminology of the FOREX market.
1. Currency pricesFactors such as economic and political conditions deeply affect currency prices. Political stability, inflation, and interest rates are all factored into the price of any currency. The price of currency can be controlled by governments who flood the market or buy extensively.
2. Volume of FOREXNo force can have dominate the market due to the volume of Forex. Market forces will prevail in the long run, making FOREX one of the most open and fair investment opportunities available.
3. World CurrencyEach world currency is given a three letter code which is used in FOREX quotes. The most common currencies are USD (US dollars), EUR (European euros), GBP (United Kingdom pounds), AUD (Australian dollars), JPY (Japanese yen), CHF(Swiss francs) and CAD (Canadian dollars).
4. Foreign exchange pricesEvery foreign exchange transaction involves buying one currency and simultaneously selling another so reading a foreign exchange quote may be a bit confusing at first but it gets simpler if you keep in mind that the first currency listed first is the base currency and that the value of the base currency is always 1.Forex quotes can be used to determine prices of foreign exchange. The first currency is the 'base' and the second is the 'quote' currency. In this example: USD/EUR = 0.8419 the currency pair is US dollars and European euros.
The base currency (USD) is always at '1' and the quote currency shows how much it costs to buy one unit of the base currency. In this example, 1 US dollar costs 0.8419 euros. Conversely EUR/USD = 1.1882 tells us that it costs 1.1882 US dollars to buy 1 euro. When the price of the quote currency goes up it indicates that the base currency is becoming stronger one unit of the base currency will buy more of the quote currency. The base currency is made weaker when the quote currency is weak.
How to learn forex
There are several ways to learn forex, the term that stands for foreign exchange. The best is through full-time educational programs that teach the working of forex markets. Another way is through forex books. However, this is a time consuming method, and the individual has to spend hours to dig out relevant information.
There is also a practical method. This involves working with a forex brokerage or with a forex trading firm. Irrespective of which method an individual chooses, it is not easy to learn about forex. The forex market is the largest market in the world where trade is conducted round the clock in real time.
There is no centralized trading post, and no centralized governing body. The entire trade is seamless, and works across time zones and across countries. It seems like new information is discovered about something every day. And the topic of Learn Forex is no exception.
Keep reading to get more fresh news about Learn Forex. Ninety-five percent of this trade is speculative in nature, and is carried out by traders who want to make a profit by trading in foreign currency.
The remaining five per cent is conducted by countries that use foreign currency to buy or sell products or services.The most important forex markets are London, New York and Tokyo, and the most traded currencies are the US Dollar, European Euro, Japanese Yen, Swiss Franc and British Pound. These currencies are traded in pairs. For instance, the pair EUR/USD for a purchaser indicates that the trader is buying the Eurocurrency and selling the U.S. Dollar because the trader anticipates that the Euros are likely to gain in value as compared to US dollars.
The trader may end up making a profit if the Euro escalates against the dollar or the trader may loose if the Euro falls. This is where the skill of the trader lies, to anticipate how a market is likely to move. The trader does not have sufficient time to make these decisions because the market is working in real time conditions. Even the smallest of delay can reduce profit margins or increase losses.
A few traders rely on their instinct and experience while making these trades. However, most traders use analysis of market movements to come to buying or selling conclusions. So now you know a little bit about how to learn Forex. Even if you don't know everything, you've done something worthwhile: you've expanded your knowledge.
There is also a practical method. This involves working with a forex brokerage or with a forex trading firm. Irrespective of which method an individual chooses, it is not easy to learn about forex. The forex market is the largest market in the world where trade is conducted round the clock in real time.
There is no centralized trading post, and no centralized governing body. The entire trade is seamless, and works across time zones and across countries. It seems like new information is discovered about something every day. And the topic of Learn Forex is no exception.
Keep reading to get more fresh news about Learn Forex. Ninety-five percent of this trade is speculative in nature, and is carried out by traders who want to make a profit by trading in foreign currency.
The remaining five per cent is conducted by countries that use foreign currency to buy or sell products or services.The most important forex markets are London, New York and Tokyo, and the most traded currencies are the US Dollar, European Euro, Japanese Yen, Swiss Franc and British Pound. These currencies are traded in pairs. For instance, the pair EUR/USD for a purchaser indicates that the trader is buying the Eurocurrency and selling the U.S. Dollar because the trader anticipates that the Euros are likely to gain in value as compared to US dollars.
The trader may end up making a profit if the Euro escalates against the dollar or the trader may loose if the Euro falls. This is where the skill of the trader lies, to anticipate how a market is likely to move. The trader does not have sufficient time to make these decisions because the market is working in real time conditions. Even the smallest of delay can reduce profit margins or increase losses.
A few traders rely on their instinct and experience while making these trades. However, most traders use analysis of market movements to come to buying or selling conclusions. So now you know a little bit about how to learn Forex. Even if you don't know everything, you've done something worthwhile: you've expanded your knowledge.
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