This is a stock trading course for beginners to introduce individuals interested in learning to trade stocks the fundamentals of market operations and trading.
If you are looking to learn how to trade stocks you have come to the right place. Today, many jobs can be performed online and independently. One of the jobs that has seen an increase in popularity with the growth of the internet is stock trading. But, people interested in stock trading face a problem: how can they learn how to trade successfully? This guide will cover the following topics to help you get the best start in the stock market:
- Fundamental Analysis & Technical Analysis
- How to Read Stock Charts
- Where to Find the Best Stocks to Trade
- A Basic System to Use for Trading
To start off, let’s take a look at what makes a stock trade.
A stock represents a piece of a company. That piece has value for as long as the company has value. Rather than taking a loan from a bank that would have to be paid back, companies issue stock that people can buy. When people buy stock, the company receives the money and can use it to grow their operations. In return, the stockholders expect the company value to go up, earning them a profit.
Stocks are bought and sold on exchanges. The most well known exchanges in the world are the New York Stock Exchange (NYSE) and the NASDAQ. There are two parties involved in every stock trade: a buyer, and a seller.
A buyer is a person or another company looking to purchase stock. The buyer will create an order for a specific amount of stock and make a bid on the price they would like to purchase it for.
The seller is a person or another company who already owns stock. They are either looking to cash out for profit or cut losses. The seller will create an order to release a specific amount of stock and ask for a price they would like to sell it for.
Types of Orders
When buyers and sellers create their orders for stock, they can choose how they would like them to be carried out.
- Market Order
- Used when a buyer or seller wants the trade to happen as fast as possible. The buyer or seller cannot choose the price they would like to bid or ask for, only the amount of stock.
- Limit Order
- The standard stock order. Buyers and sellers select price and amount, and the order will not be carried out until the price is met.
- Stop Loss Order
- Used to limit losses. A trader will set this order if they fear the stock will not go the direction they predicted.
As soon as the criteria are met for a buyer’s order and a seller’s order, they are connected and the stock is traded. When the stock trade goes through, this is a trade execution.