The stock market brings together buyers and sellers, allowing them to trade with each other. Investing in the stock market today has become much easier and is accessible to everyone with the help of technology. In the old days, trading stocks was something done only by the elite and institutions. Some of the better known markets are the Dow Jones, New York Stock Exchange (NYSE), S&P 500 and Nasdaq. In the US, the NYSE is the biggest by market cap with more than US$12 trillion.
Investors who wish to trade stock on the stock market must do so with the help of an online broker. They will execute any orders to buy or sell that you give them, while at the same time, they can give you stock tips and advise you on stock picking certain companies. This kind of service will cost more and has higher commissions.
Other services they will provide you with are technical analysis and chart analysis. They will help you form strategies based on your needs and provide you with performance reports on your portfolio. If you do not require these extra services, you can simply use a discount broker who will only execute your orders and not provide any stock picks for you.
Before you enter the stock market, you need to familiarize yourself with how to choose good stocks and how the market moves. You can learn this through a stock market video or by reading through the many books on investing. This is important as it will reduce the risk of you losing money from lack of knowledge. To stock pick a company, you can use fundamental or technical analysis to determine if the share prices are likely to increase. Fundamental analysis will look at the company’s value by analyzing its management and their abilities to run the company. It will look at its balance sheet and financial statements, the competition it faces, and the sector it is in. By researching these factors, you can determine if the company has what it takes to succeed in the long term.
Technical analysis does not care about the value of the company, but instead focuses on the company’s price and volumes. It looks at historical data on price and volume movement and looks to identify similar patterns in the stock as it trades on the stock market.