Stocks Online Trading » stocks and shares

Forex Trading vs Stock Trading

Anami — Fri, 20 Mar 2009 06:16:31 +0000

The Differences Between Forex Trading and Stock Trading

In the stock market the most common way of placing an order is to buy a share of stock, and sell it later at a higher price. This is essentially what all businesses do. They buy something at one price and attempt to sell it at a higher price. Forex trading is no different. With forex trading, currencies are always traded in pairs. Since you have to pay one currency for another, the transactions always involve a “pair” of currencies. The goal of forex trading is to buy the “currency pair” at one price, and sell it later for a higher price.

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There is also another way to make money on the stock market or online stock market, This other way is called short selling. Short selling is simply when you sell the stock first at one price, and then try to buy the stock back at a lower price. The goal does not change – you still want to buy low and sell high. With short selling, you just sell the stock first. Short selling has a much larger risk than traditional stocks and shares trading. There are many rules that limit short selling to serious market professionals.

Forex trading does not impose any limit on short selling. The risk on short selling in forex is no different than the risk of buying in forex. I know you may be asking, “Why isn’t there any risk or limitations on short selling on the forex?” Simply answered, the rules are different in forex trading.

If you would like to find out more about the world of forex trading strategies and how it provides the greatest opportunity for fast and substantial profits then click on the link below. They are the absolute best and most effective forex trading strategies available anywhere. Good luck trading.

By George Knoechel www.forex-trading-system-review.com

Dividend and success in share market

Anami — Fri, 06 Mar 2009 08:20:19 +0000

Dividend and success in share market

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The initial dividend yield is the share of its profits that a company pays to its shareholders. Not all of the company’s profits are paid in dividends. Selling a share can take seconds. Shares have a definite value: Creating a share portfolio enables you to invest in a number of industry sectors.

How To Plan For Success In The Share Market:

To trade shares in the stock market successfully you need a strategy. This strategy is known as a stock market share trading system. A share trading system is made of 5 components:

Style : Definition of share trading objective

Entry : Conditions required to enter share trade

Risk : Rules to limit losses

Exit : Rules to define share exit points

Risks You Should Be Aware Of:

Overall market risk : This is the risk of loss by reasons of movements in a market sector. Market risk can be minimised by having a spread of investments across different types of assets.

Global risk : This is the vulnerability of an investment to international events or market factors.

Sector risk : The risks associated with an industry’s specific products or services such as, demand for the product or service; commodity prices; the economic and industry cycles; changes in consumption patterns; lifestyle and technology changes.

Equity specific asset risk : risks associated with the specific investment, for example, quality of the company’s directors; the strength of management and key personnel; profitability and asset base; debt level and fixed-cost structure; litigation; competition levels; liquidity of the investment.

Timing Risk : The possibility that you enter the market at a bad time, for example, just before a fall in the share market.

Stocks and shares: Market Analysis Fundamental

Anami — Sat, 14 Feb 2009 10:15:07 +0000

Share Market Analysis Fundamental Analysis vs Technical Analysis

By Jon Lynch

Fundamental Analysis:

Fundamental analysis involves the use of financial and economic data to evaluate the liquidity, solvency, efficiency and, most importantly, the earnings potential of a given company. The fundamental analyst’s kitbag of tools includes the corporate annual report and its financial statements, legal comments by corporate officers, industry statistics and market trends, as well as macro-economic data.

With this information in hand, the fundamental analyst’s goal is to ferret out undervalued stocks, and then buy them in anticipation of the appreciation that should occur when this value comes to light.

Technical Analysis

A technical analyst doesn’t look at income statements, balance sheets, company policies, or anything fundamental about the company.

Technical analysis looks at the actual history of trading and the price of a security or index. This is usually done in the form of a chart. The financial product can be a stock, future or an index,.

The technical analyst believes that securities move in trends. And these trends continue until something happens to change the trend. With trends, patterns and levels are detectable. Sometimes the analysis is wrong. However, in the overwhelming majority of instances, it’s extremely accurate.

Technical analysis is stock market research of price action over time and charts are what an analyst works with as their primary record of price action. Behind every price is an investor who had a reason for buying or selling. Traders generally act alone but often their weight of numbers has a direct influence on short term prices.

Researching the stock market with charts and technical indicators is the study of group behaviour and sentiment. It is done with science and art. We use science because we use mathematical formula, computers and statistics.

Charting is the study of price action of a market itself as opposed to the study of the goods in which a market deals. Technical analysis is simply a different means of using stock market research to arrive at the same investment objectives.

These goals may be summarised as:

* To gauge the relative strength of buyers and sellers;

* To identify preferred times to buy and sell;

* To develop a theory as to how far price may reasonably be expected to move; and

* To formulate a risk strategy.