Stock Trading Two Ways
Trading stocks can be risky, exciting, lucrative, and scary; it creates a lot of emotions. But for many, stock trading is more confusing than anything else. Understanding the game of trading stocks begins with understanding how to do it in the first place. Stock trading is done in one (or both) of two ways: on the exchange-room floor and online.
Stock trading is actually named incorrectly. When you “play the market,” you aren’t actually “trading” stocks—you’re buying and selling different shares of different companies. Trading stocks and the Internet go hand in hand these days; in fact, some markets trade electronically exclusively. However, the exchange room floor is still pretty busy. Ever seen Wall Street? The busy floor, crowded with screaming men, is a fairly accurate representation of what the exchange room floor is like.
The New York Stock Exchange (NYSE) is the best-known example of an exchange room floor, and incidentally the subject of the aforementioned movie. The NASDAQ is an electronic stock exchange, which traders access through the Internet.
In either case, average individuals will find that they cannot complete trades either on the floor or on the Internet—at least, not without a stock broker. Here’s how it works: you tell your broker how many shares of what you’d like to buy, the broker checks the availability and buys your stocks. You earn by buying low and selling high, and that’s the name of the game when it comes to trading stocks.
Though you may work through a stock broker, individuals are still in control of their fates. To successfully trade stocks, keep an eye on the market and get a sense of how it works before delving right in. The goal is to sell your stocks for more than what you paid, so keep an eye out for up-and-coming companies, new products and other factors which might increase a company’s stock market worth.
