Author Topic: FOLLOW ME AS WE LEARN HOW TO TRADE GLOBAL STOCKS PROFESSIONALLY  (Read 3293 times)

Offline donlucky

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FOLLOW ME AS WE LEARN HOW TO TRADE GLOBAL STOCKS PROFESSIONALLY
« on: September 01, 2008, 07:02:24 AM »
Introduction
Over the last few decades, the average person's interest in the stock market has grown exponentially.  What was once a toy of the rich has now turned into the vehicle of choice for growing wealth.  This demand coupled with advances in trading technology has opened up the markets so that nowadays nearly anybody can own stocks.
Despite their popularity, however, most people don't fully understand stocks.  Much is learned from conversations around the water cooler with others who also don't know what they're talking about.  Chances are you've already heard people say things like, "Bob's cousin made a killing in XYZ Company, and now he's got another hot tip. . . " or "Watch out with stocks--you can lose your shirt in a matter of days!" So much of this misinformation is based on a get-rich-quick mentality, which was especially prevalent during the amazing dotcom market in the late '90s.  People thought that stocks were the magic answer to instant wealth with no risk.  The ensuing dotcom crash proved that this is not the case.  Stocks can (and do) create massive amounts of wealth, but they aren't without risks.  The only solution to this is education.  The key to protecting yourself in the stock market is to understand where you are putting your money.

It is for this reason that I have written this tutorial: to provide the foundation you need to make investment decisions yourself.  We'll start by explaining what a stock is and the different types of stock, and then we'll talk about how they are traded, what causes prices to change, how you buy stocks and much more.

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FOLLOW ME AS WE LEARN HOW TO TRADE GLOBAL STOCKS PROFESSIONALLY
« on: September 01, 2008, 07:02:24 AM »

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Offline donlucky

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Re: FOLLOW ME AS WE LEARN HOW TO TRADE GLOBAL STOCKS PROFESSIONALLY
« Reply #1 on: September 01, 2008, 07:04:27 AM »
WHAT IS A STOCK
This is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings. 
There are two main types of stock: common and preferred.  Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends.  Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares.  For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated. 

Also regarded as share, a holder of stock (a shareholder) has a claim to a part of the corporation's assets and earnings.  In other words, a shareholder is an owner of a company.  Ownership is determined by the number of shares a person owns relative to the number of outstanding shares.  For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company's assets.

Stocks are the foundation of nearly every portfolio.  Historically, they have outperformed most other investments over the long run.

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Offline donlucky

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Re: FOLLOW ME AS WE LEARN HOW TO TRADE GLOBAL STOCKS PROFESSIONALLY
« Reply #2 on: September 01, 2008, 07:06:24 AM »
How Stocks are Traded
Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price.   Some exchanges are physical locations where transactions are carried out on a trading floor.   You've probably seen pictures of a trading floor, in which traders are wildly throwing their arms up, waving, yelling, and signaling to each other. 



The other type of exchange is virtual, composed of a network of computers where trades are made electronically. 
The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers, reducing the risks of investing.   Just imagine how difficult it would be to sell shares if you had to call around the neighborhood trying to find a buyer.   Really, a stock market is nothing more than a super-sophisticated farmers' market linking buyers and sellers. 
Before we go on, we should distinguish between the primary market and the secondary market.   The primary market is where securities are created (by means of an IPO) while, in the secondary market, investors trade previously-issued securities without the involvement of the issuing-companies.   The secondary market is what people are referring to when they talk about the stock market.   It is important to understand that the trading of a company's stock does not directly involve that company. 

« Last Edit: September 01, 2008, 07:09:26 AM by donlucky »
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Offline donlucky

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Re: FOLLOW ME AS WE LEARN HOW TO TRADE GLOBAL STOCKS PROFESSIONALLY
« Reply #3 on: September 01, 2008, 07:21:16 AM »
ADVANTAGES OF GLOBAL STOCKS OVER LOCAL STOCKS TRADING
There are several advantages of global stocks over local stocks trading, but am going to give you some very vital ones.

no. 1 LIQUIDITY and AUTOMATIC: Unlike the local stocks, with the International stocks you don't need to worry about having issues with your broker, once you have created an account with a broker, you will be given a trading platform through which you will be given a direct access to all the stocks traded in any stock market in any part of the world, no need calling your broker any time you want to get a stock purchased, all you need do is click buy and it is bought and click sell and it's sold; withdrawal of your fund is automated, you do the buying and selling yourself.

no. 2 LEVERAGE (MARGIN): This is a multiplier on your trading capital or your buying power; for instance if you have $500 deposited on your trading account, and you are given a LEVERAGE of 1:2 meaning what so ever amount you have on your account is multiplied by 2 (doubled). this means your $500 will then be reading $1000 on your trading account.   on the global stocks trading, the broker gives you a leverage to enable you have a greater buying or dealing power on the market unlike our local stocks that you must have to buy a stock with only your real cash; this has make it so difficult for the low net worth individuals to actually buy our local stock.

no. 3 TWO WAY MARKET: Global stocks market is a two way market; some of us that have been trading the local stocks will find this as "too good to be true" but believe it on not, it's the truth, with global stocks one can buy a stock and later sell off to make profit, we can also short-sell a stock and then later buy back at a lower price to make profit, for short-selling, the different between your short entry and your buy back entry becomes your profit.  For example, if you short an XYZ stock at a price of $50. 00 per share today, and a week’s later it fell to $10. 00 a share, and that was the least it could fall and then you decided to repurchase that same stock at the current price of $10, Now the difference between the initial price at which you short it and the current price at which you repurchased it becomes you profit.

Note: If we sell a stock in an expectation to make profit if the stock fall deeper, it is called "shorting" or "short selling"

no. 4 AVAILABILITY OF INFORMATION: with global stocks you don't have to scavenge for information as regards the stocks you bought or intend buying; through the research engine of your broker's trading platform, you can research for the general information and updates of that stock proposed buying or selling with no hassles which i believe with our local stocks, it is difficult.

No. 5 HIGHER INVESTMENT YEILD:  Prices of stocks on Nigerian stock exchange are regulated not to exceed 5% daily.  But, global stocks are more volatile and can run over 1000% returns on investment (ROI) daily, depending on your stock pick
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Re: FOLLOW ME AS WE LEARN HOW TO TRADE GLOBAL STOCKS PROFESSIONALLY
« Reply #3 on: September 01, 2008, 07:21:16 AM »

 

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