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Things You Should Know About Stock Trading
By Ispas Marin, Thu Dec 8th
If you consider the possibility of trading stocks, there aresome things you should know from the start. The first thing youshould know is what exactly stocks trading mean. Well, first ofall, stock shares represent a way companies raise capital fortheir business. A company issues new stock share, people buythem and the money goes into the company's bank accounts to beinvested in the company's business. The public has access tothese stock shares through a stock broker who is selling andbuying them. One thing you should always keep in mind when youstart buying shares: their price is constantly changing based onsupply and demand balance for those shares. When the supply ishigh, the price falls; but when the demand is high, the price isgoing up. This is the golden rule of stocks trading. A raise ofprice brings money to your pockets. Stocks trading have changed lately due to technologicalevolution. Internet has eased the selling and buying process. Itis now possible to sell and buy shares instantly. Consequently,the stocks trading process has changed as people chose to selland buy more often instead of just keeping the shares as theyused to do years ago. Stocks trading are a process that presents both advantages anddisadvantages. (Article continued below)
First of
all, the profit is bigger when you are constantlytrading your shares portfolio instead of just keeping the sharesfor years. There is a huge amount of shares available for buyingon the market. But be careful, not all shares have price movingup. You just have to dig up and find those shares whose pricesare bringing you profit. If you don't know what company's shares are better to buy, youcan always go for popular companies as Microsoft or IBM. Theyalways bring a sure profit. Leverage is stocks trading biggest disadvantage. This means thatif you have a margined account, the maximum leverage you can getis no more than 4:1. Forex trading and even futures tradingoffer better deals than stocks trading. Another disadvantage isthe fact that a trader who is doing more than 4 trades in a 5days period is required to hold at least $25, 000 in his/hertrading account. The uptick rule represents another disadvantage of the stockstrading process. You are required to wait for the stock price totick up before you are aloowed to sell it. Another big disadvantage is the cost of stocks trading. Althoughthe costs for online trading are low, they still count quite alot at the end of a trading day. In conclusion, stocks trading are a process which has itsupsides and downsides as any other trading method. The bestthing for you is to choose the kind of trading you consider ismost suitable for you. But keep in mind that all tradingprocesses (no matter if they are forex trading, future tradingor stocks trading) have both advantages and disadvantages. About the author:For a Stock Trading system and investment strategy that issimple and easy to follow just visit http://www.mytradingsystem.net Portfolio management strategies that work in all typesof stock market. | 
