Monday, 16 June 2014

Analysing the technical Steps of Investment and Trading of Stocks

Trading involves the basic selling or buying a trade for a minute to a period of six months. On the other hand, investment means in simplistic terms to make the money work and pay money for the investor.

Guidelines on Basic Steps of Trading and Investment by Doug Mears – CEO of National Trading Corporation.

Characteristics of Investment in stocks:
The unaccountable profits of investment comes along with the topic of potential loss. If this statement churns your innards, stick to the savings option, which focuses solely on the risk and awaits the principal amount. Investment however focuses on the return and none on the risk. The unexpected factors of inflation and such return null even with the pre-accorded risk factors of saving.
      Upside Potential
Ownership of a stock as part of investment means taking part in the growth and stunts of the company. With the increase in the value of the company the investment, profits and the individual dividends increase.
Buying a stock means, buying a share of the company which means the confirmed certification of a part of stock. The ownership provides the investor with a confirmed say on any decisions to change, improvise or act on the property.

Ways to execute the Trade
            Exchange Floor
The trade directly on the floor is the imagery to assert the real aspect of trading in New York Stock Exchange. The process is carried out as in the example,
o   Tell the broker to buy 10 shares of Kleenex
o   Broker transfer the order to their clerk on exchange floor
o   Clerk finds the trader on the floor willing to sell 10 shares of Kleenex
o   Both the parties agree on one deal of price
o   Deal completes
o   Broker calls to confirm the price
o   Few days after, call to the trader confirms the notification
The consistence of the rush and hurry of a Stock Exchange like the one of New York is limited when considering the human based involvement in it. A small percentage of NYSE is electronically done while its competitor NASDAQ is entirely electronic. The electronic market on its own locates and connects the buyer to the seller and eliminating the brokers. Larger institutions prefer this kind of funding for its markets.

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