Wednesday, August 8, 2012

How The Stock Market Works

Trading on a country’s stock market requires skill and discipline. Some traders have skill and execute a plan for trading; however they don’t have the discipline to stick to their plan, so they lose money.
The stock exchange consists of publicly traded companies. Not all companies which are publicly traded suit individual traders.
Before choosing which shares of a company to trade on the stock market, evaluate the company carefully. Make sure that it meets the criteria you set. These criteria are those that guarantee your success as a trader.
A stock market provides companies with a liquid environment for trading their securities. Strict regulations apply to the market. A body usually oversees the trading in shares that is done every work day in the stock market.

Image via Wikipedia
This regulatory body oversees trade in securities on the stock exchange. It also usually is responsible for licensing brokerage houses that trade on the exchange. Investment dealers and advisors are often licensed by this same organization in most countries.
Actual direct trading on the stock exchange can only be doe by registered stock brokers. Registered stock brokers trade bonds and shares on the market on behalf of their clients.

Image via Wikipedia
Members of the public who want to trade on the exchange but are not licensed as securities dealers usually have to open an account at a licensed brokerage firm. After opening an account with a minimum balance for trading, they can request that stocks be traded on their country’s exchange on their behalf.
You may also like:

No comments: