Article Categories
» Arts & Entertainment
» Automotive
» Business
» Careers & Jobs
» Education & Reference
» Finance
» Food & Drink
» Health & Fitness
» Home & Family
» Internet & Online Businesses
» Miscellaneous
» Self Improvement
» Shopping
» Society & News
» Sports & Recreation
» Technology
» Travel & Leisure
» Writing & Speaking

  Listed Article

  Category: Articles » Finance » Stock Market » Article

Stock Market Trading

By Sandro Azzopardi

The stock market offers various opportunities for trading. Apart from the main securities, which one can trade on various exchanges like the New York Stock Exchange and Nasdaq, there are other forms of trading like forex trading, currency trading and 'contracts for difference' also known as CFDs.

Stock market trading normally involves opening a trade by going 'Long' (buying) or going 'Short' (selling). The later has been possible through the last few years. One can today 'sell' a stock with the aspiration that the stock goes down and buy it cheaper at a later time, thus making profit as a result of the diminishing of the stock value.

Greed and Fear
Stock market trading can be very profitable but if not mastered correctly can lead to heavy losses and the loss of ones own capital. Various psychological factors can affect the way one trades. The most predominant ones are 'greed' and 'fear'. Greed kicks in when your system directs you to exit a trade but rather than exiting, one remains in the trade with the hope of closing the trade at a better price. On the other hand, fear is also a very dangerous factor which can lead to exiting trades when the time is not right, or exiting trades too early.

The best way to keep these feelings away is only one follow your system vigorously. In order to fully trust a system, it would first need to go through a lot of testing in order to seed in one's mind the thought that the system works and is completely reliable. It is only when one is convinced of this that when the feelings of 'greed' and 'fear' rise, they are controlled and ignored.

CFD Trading
One very interesting way of trading is CFDs (contracts for difference). Rather than buying and selling the actual shares, one would enter into a contract with a broker to buy or sell a particular share at an agreed price. The price would still be the market price at the current time, and the speed of transactions is similar to the speed of actually trading the shares, i.e. a few seconds. One of the advantages of CFDs is 'trading on margin'. Some brokers offer very competitive margins where, for example, with a capital of $20,000, one could trade shares for a total of $100,000. This can be very dangerous and is only advised to the professional market players.

Technical Analysis
Hundreds of technical tools exist for traders. Various software systems can display a stock's chart in real time, enabling you to draw trending and trading lines, include calculations like moving averages and ratios, and some can even predict the price based on a combination of factors and previous training and testing cycles.

Charts are a must for most stock traders. A chart tells the story much more than words do. By looking at a chart, a professional trader can diagnose the condition of a particular stock, just like a doctor does with his patient. Adding some analysis tools to a chart can further help in understanding what is going on with a particular stock.

On charts one can determine whether a stock is overbought or oversold, whether a stock is reaching a support or resistance level, is heavily in demand and short of supply or vice versa. As a result of these factors and many others which one can include in a system, a decision to buy, sell or exit trades can be taken.

Stock market trading is a high return job for those who are serious about it. Various methods exist and some degree of research is required before one can start trading for a living.
About the Author
Sandro Azzopardi is a professional author who writes several articles on various subjects on his web site and local newspapers and magazines. You can visit information about this article and others on:

Article Source:
If you wish to add the above article to your website or newsletters then please include the "Article Source:" as shown above and make it hyperlinked.

  Some other articles by Sandro Azzopardi
Market Research
What makes a market research survey a good survey? There is no simple answer to this question, and it is not one aspect, but various aspects together that make for a good piece of ...

The Evolution of Project Management - Part 3
...continued from Part 2 Why Project Management? There is no doubt that organisations today face more aggressive competition than in the past ...

The Evolution of Project Management - Part 2
...continued from Part 1 Four periods in the development of modern project management. [1] Prior to 1958: Craft system to ...

The Evolution of Project Management - Part 1
Importance of Project Management is an important topic because all organisations, be they small or large, at one time or other, are involved ...

ISO9000 & Beyond
To be successful, organisations must prove themselves to be indispensable to their customers, be attuned to their employees' needs, be willing to partner with their suppliers, ...

Strategic Business Planning - Part 3 - Exhibits
EXHIBIT A The Critical Success Factors SENIOR SUPPORT The top people should "walk the talk". The board of directors and the senior managers ...

  Recent Articles
Be A Rebel: Contrarian Investing
by Christopher Smith

Advantages of Online OTCBB Stock Trading
by Praveen Ortec

Online share trading can be a liberating experience
by Martin McAllister

The Bulls And Bears Game: Risks And Survival Strategies In Investments
by Wain Roy

How Do You React When Your Stocks Are Down
by Christopher Smith

What You Don't Know About Micro Cap Stocks
by Christopher Smith

Free Money in Stock Market: Conversion
by Alexander Chong

Stock Trading Tip
by Joe Grabowski

Penny Stock Winners - What To Do Next
by Christopher Smith

The Stock Market For Newbies
by Joe Grabowski

Forex Trading Course: A Must for Forex Beginners
by Zevs Borealis

How To Get An Advantage Trading Penny Stocks
by Christopher Smith