What is the US stock market today?
The US stock market is now essentially an auction where investors buy and sell shares of public companies. The stock market is controlled and regulated by the stock exchange. For example, the US stock market is made up of two of the world's largest stock exchanges – the New York Stock Exchange and the Nasdaq Stock Exchange. They help organize the trading of shares in publicly traded companies such as Amazon, McDonald's, Nike, Walmart, and others.
The total value of the US stock market fluctuates every day depending on the number of transactions. According to the Intercontinental Exchange, which bought the New York Stock Exchange in 2013, the total value of the U.S. stock market on the New York Stock Exchange on January 31, 2018, was over $ 30 trillion. These calculations were made based on US stock market data for all listed companies.
The path to successful trading on the stock exchange begins with obtaining stock exchange knowledge. Therefore, before you start learning the basics, remember that the term “gambling” is fundamentally wrong. Trading on the stock exchange is not a game, but a job that requires serious knowledge in a specific area. Many novice traders believe that gambling is akin to going to the casino. But this is not so: stock quotes, unlike winning numbers on roulette, are determined not chaotically, but according to certain rules and laws. Traders who know and follow these rules ultimately reap significant benefits. How does the exchange work and what is it?
Stock exchange – a specialized trading platform that provides traders not only with a place to sell and buy securities but also monitors the security of personal data. All trading participants are required to comply with the rules and fulfill the obligations established by a particular exchange. The type of exchange depends on the instruments used during trading: stock, currency, commodity, and derivatives. The main clients of the exchange are credit organizations and brokerage companies, through which private and corporate investors carry out exchange operations. Trading on the stock exchange is conducted mainly via the Internet using special computer programs.
How to trade on the stock exchange?
For trading on the exchange to be successful, it is necessary to approach the following key points with all responsibility:
Choosing a broker. The Russian securities market is designed in such a way that private investors do not have direct access to the exchange. All transactions on their behalf are performed by stockbrokers who act as intermediaries between the exchange and the investor. Therefore, finding a good broker is a top priority for any novice investor. Each broker must be licensed as a professional securities market participant. You can clarify whether the intermediary you have chosen has a relevant document on the website of the Central Bank. Be sure to check its reliability rating as well. The best brokers are considered those who belong to the “AAA” group. On the Moscow Exchange website, you can clarify whether a particular intermediary provides access to a particular market. To do this, you need to find the “Markets” tab on the main page, select the desired item (“Stock”, “Urgent”,
Site selection. The best option for novice traders is trading on the stock market of the Moscow Exchange. The choice of investment tool and strategy. How can you make money on the stock exchange? The main thing is not to chase all the rabbits, but to concentrate your attention on a specific asset. Consult with your broker which strategy to prefer – more or less risky, and based on this decision, choose which securities you will invest in. It should be remembered: the higher the risk, the greater both the potential income and the potential loss.
Types of investments on the stock exchange
In the terminology of traders, the stock market is ruled by bulls and bears. They differ in the way they make money on the exchange:
bull traders buy stocks with high upside potential. Then, relying on the data from the analysis, they wait for the price to rise and sell the stock. The trader's profit in this case will be the difference between selling the stock after and buying before the price increase. A trade opened while a trader is waiting for a price increase is called a long position, or “long”;
bear traders do the opposite. They borrow stocks from a broker, sell them at a high price, then wait for prices to fall. After that, “bears” buy cheap shares and give a loan to a broker. The trader's profit is the difference between selling expensive and buying cheap. Until the trader buys the stock, he is short or short.
How to make money on the stock exchange without investments?
You can get hands-on experience of trading without risk to equity capital by trading with a demo account (demo account). With a virtual demo account, you can trade in real conditions. Most brokers offer such accounts for an unlimited period – so you can develop your own trading strategy, which can later be successfully used on a real brokerage account.