BEST STOCKS TRADING STRATEGY - Stocks Trading Tutorial!
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Investing is much more than a numbers game, but you can't get far from numbers if you want to understand what's going on in the market or with your stocks. Stock market quotes, which you can find in a daily newspaper or online , are the most basic collection of numbers that vendors update regularly.
When it comes to buying and selling stocks, exchanges act more like flea markets than centers of financial sophistication. This is why you need to understand bid and ask prices. Unlike most things you buy, both the buyer and seller set prices for the stock. The buyer indicates what price they will pay for the shares-this is the offer price. The seller also has a price-the asking price.
Stock prices and why they rise and fall may seem like another mystery. You will hear about the impact of earnings on stock prices, the economy, or the credit market. While all of these factors affect price changes, they do not directly affect prices. These and other factors change the balance of supply and demand.
Buy low and sell high (or overweight) is the ultimate guide to successful stock investing. This is also the flip side of what many investors do. It's not that investors start doing this, but too often they use price, and in particular price movement, as their only signal to buy or sell. Stocks that have risen recently, especially those with a lot of press, often attract even more buyers. This obviously raises the price even higher.
More and more investors are choosing to use an online broker for their trading, which often means they need to know exactly the type of buy or sell order they want to enter. You can use different buy or sell orders to gain more control over the trade than a simple market order. Some of the orders limit the trade by price, while others limit it by time.
When the bottom falls out of the price of your favorite stock, a Stop loss order held by your broker can help ease the pain. Stop loss orders your broker to sell when the price reaches a certain point. The goal of a stop loss is obvious—you want to exit the stock before it falls even further.
Trailing stops, a form of stop-loss orders, can also protect a profit and, if you're smart, to monitor the growth of the stock price.