Does stock trading interest you? If it does, here are a few items to consider before jumping into the stock trading arena. First and foremost, what exactly is a stock? A stock is a representation of a share in the ownership of an incorporated company, you essentially own a piece of the company. When you purchase a stock, you are given the opportunity to watch the company and stock grow or decline. This is why research is needed before you begin purchasing stocks. You should always research the company , look at the trends of the company and the industry that the company is in. If you completed your research thoroughly, you can stand to earn a profit, given the industry that you picked is growing. Always be aware, the industry could turn at any moment and you could end up losing money.
Essentially the goal of stock trading is to earn a profit, this is done by purchasing stocks when they are low and trading them when the stock grows. Here are four different ways to go about trading stocks;
Scalping - Scalping involves buying large quantities of shares in a stock, and you are just looking for a small move in the stock price.
Day trading - Day trading is similar to scalping but you are looking for bigger moves in the price, and you do not hold the stock overnight.
Swing Trading - Swing trading is when you buy a stock and hold it for a short period of time looking for a substantial move in the price.
Buy and Hold - Buy and hold is when you plan on holding on to the stock for a long time. You believe the company is going to grow in value and the price is going to go much higher.
When you enter into the stock trading arena, you need to decide which kind of stock trader you would like to be. They all have their good and bad attributes, it just depends if you are looking for short term gains or long term gains in the stock market.
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