Trading stocks on the stock market, investing in the forex market, metals and digital currencies have become one of the most important major financial activities in the world, and it has become important to know the basics of trading stocks and bonds on the stock market and learn trading strategies for safe investment in order to make big profits and reduce the probability of loss to the lowest possible percentage. In these lines we will learn about the stock market and how to trade stocks and other investment assets.
The stock market :
The stock market is a market that brings together sellers of stocks on the one hand and buyers of stocks on the other to trade stocks. The stock market is a part of the money market that contains other investment assets such as forex and digital currencies, and in the second table there is a summary of the difference between stocks and bonds.
Shares are an asset of ownership, in the sense that each share is considered part of the company's capital, and the shareholder is considered one of the owners of the company. Each share has its share of dividends, which the company periodically makes. The share price is determined based on supply and demand.
Bonds are an asset of debt, in the sense that each bond represents part of the debt owed by the company, and the holder of the bond is considered a creditor of the company and not one of its owners. Each bond has an interest rate called a coupon that the company pays to the bondholder. The price of a bond is determined based on supply and demand.
The US stock market is the largest market in the world in terms of volume of traded assets and liquidity, the following is the ranking of the largest stock exchanges in the world.
1 US stock market New York NYSE index, Nasdaq Nasdaq index
2 China stock market (Shanghai) Shanghai Stock Exchange SSE Index, Hang Seng HSI index
3 stock market of England (London) FTSE FTSE100 index
4 Stock Exchange of Germany (Frankfurt) DAX index DAX 400
Stock trading :-
Stocks are traded as one of the trading methods for investing in their price movements up and down. The difference between stocks and bonds is that stocks are property assets so that the shareholder owns part of the company issuing the stock, while bonds are debt assets only, and profits are made from stock trading by buying the stock at a low price and selling it at a high price so that the profit is equal to the difference between the purchase price and the selling price.
There are different ways in which stocks are traded; there are those who buy the stock directly from companies in what is known as an IPO, in which the company raises funds by selling a group of its shares to individuals and institutions. Stocks can also be traded through CFDs or through financial derivatives, which are considered speculation on the stock price and not an actual purchase of the stock, and stocks can also be traded through indices, which consist of a group of stocks that are traded together through index trading, and it is also considered one of the methods of hedging against risks.
Trading for investment in Forex:
Forex is a foreign exchange trading market, which is a decentralized market in which various currencies are traded between investors and financial institutions such as banks and investment funds in order to make profits from currency spreads so that profit is achieved by buying currency at a low price and selling it at a high price.commercial institutions also participate in the foreign exchange trading market for import and export purposes.
Foreign exchange is traded through the currency pairs system so that each pair consists of two currencies, for example, you find the EUR/USD pair, the USD/JPY pair and other currency pairs, and the currency pair system allows you to make profits from the price movement of the pair up and down, and the first currency in the pair is the purchased currency and the second currency is the sold currency.
The most important trading strategies :
It is important for the investor to learn the basic tools and the most important trading strategies for investing in the money markets, for example, it is important to know some basic economic analysis tools in order to anticipate changes in economic factors on the prices of financial assets, and it is also important to learn some technical analysis methods that enable the investor to read the price screen correctly and predict the direction of prices.
It is also important that the investor follows some hedging methods while investing, for example, investors use contracts to distribute the investment portfolio between different assets in order to avoid a large loss in one asset, and some investors use financial derivatives for this purpose.
One of the methods of trading for safe investment is the use of stop-loss and take-profit mechanisms offered by various trading platforms as a feature in the trading applications that they provide to their investor clients.
How to never trade on the money markets ?
Trading in the stock market no longer requires the actual meeting between the seller and the buyer like the famous Stock Exchange headquarters and following the price screen, which was ignored by investors in the past due to the delay of the announced price from the actual, but it has become much easier thanks to trading platforms that allow investors to follow the current prices of their investment portfolio assets and it is equipped with all the tools an investor needs to analyze global market trends as well as news updates affecting market movements, and the trader only has to open an investment account with one of the trading platforms and start investing.
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