Stock Market: For Beginner Investors

If you’re not well-skilled in the stock market basics, the stock trading information on the market section in your favourite newspaper can be somehow gibberish. Jargon like ‘bulls, bears, earnings movers and intraday highs” should mean nothing to you if you are an average investor, simply because you might not need them, anyway. However, if you want to trade seriously like a pro, you need to understand this jargon and basic stock trading information.

Stock market basics

The stock market is like any other market where the basics of supply and demand apply. The only difference is that in the stock market, the traded commodities are shares. However, unlike your regular marketplace where you can pick fruits off a shelf, traders are represented by stockbrokers in the stock market. Technically, when you place an order online, the broker deals with the stock exchange on your behalf to place a trade. Exchanges make up the stock market system—an example of a stock exchange is the New York Exchange or Nasdaq. When these stock exchanges list stocks, they attract buyers and sellers to come and participate. The exchange logarithms continuously track the demand and supply and directly relate to the price of each stock.

You might have heard people referring to the market being up or down. What these people are referring to are large market indexes. For more information, please visit; https://www.robomarkets.com.

What is a market index?

A market index is a hypothetical portfolio that combines several stocks to create one aggregate value that is used to measure the performance of a market or industrial sectors, like retail companies or tech companies. Because the market index represents the entire market, it can provide a benchmark to track market changes over time. For example, most traders use index values to follow market trends and other developments. You’re likely to hear most about the S&P 500, which combines 500 large-CAP U.S stocks into one index value. This index is weighted for market capitalisation, meaning larger companies with more outstanding shares significantly impact the index performance than smaller companies. While market indexes like S&P 500 give an investor benchmark to compare against their own portfolio’s performance, Other investors may invest in index-tracking instruments—such as exchange-traded funds(ETF), which comprise the same stock that makes up a particular index.

Stock trading information

Most stock investors think it’s wise to develop a diverse portfolio of equities or stock index funds and keep it throughout excellent and trying times. However, Stock trading is for those who prefer a little more action. It involves buying and selling stocks frequently in an attempt to time the market.

Stock traders aim to profit from short-term market occurrences by buying stocks at a low price and waiting for them to rise(going long) or selling stocks at a higher price and waiting for them to fall(shorting the market). Some stock traders are day traders, meaning they purchase and sell multiple times every day. Others are just regular traders who make a dozen or more trades per month. For more information, please visit; RoboMarkets.