If you decide to become a professional speculator and earn on the difference between the purchase and sale of any goods, for the beginning it would be nice to know what the market and determine which Exchange is best to trade.
Exchange is a legal entity, a business enterprise that acts as an intermediary in transactions of sale and purchase.In fact, it is the organized market, which has its own controls, the Memorandum and the rules of the auction.
main tasks of modern exchanges:
- provide potential buyers and sellers of information on current and future commodity prices under the terms of the Privacy publicity;
- the same rules to regulate the purchase and sale of all participants;
- to act as a guarantor of fairness of transactions between buyers and sellers.
The formation of exchange rates affect a variety of conditions: the yield, the political situation, the state of the world economy, the sudden news, etc.One of the postulates of stock trading extinguishes: "The price takes into account all."At present, in any corner of the globe in the formation of prices for certain goods primarily oriented to price largest exchanges.
significant difference from the stock exchange market is that no exchange both material goods and paper money.All transactions are made by agreement of buyer and seller.Modern technologies allow to fix the agreement to sell the one hand, and on the other hand - to buy goods almost instantly, electronically stykuya two sides of the transaction over the Internet.
Depending on the type of goods, exchanges are divided into futures, stock and foreign exchange.And according to the method of reference, exchange trades are pits and electronic.
What Exchange shares (Stock Exchange)
This exchange where trades are conducted in securities - stocks.Action is a formal certificate of ownership of part of the company.When people believe that a certain company has good prospects, they buy its shares, which pushes prices up.
Shares and forming opinions about their prospects depends on the income level of the company, its reports, the value of dividends.The market in this case, represents the amount of the views of all participants of the value of a company.Falling share price often means that holders of large blocks begin to sell them.Therefore, as a professional stock speculators say, "buy cheap - good, but not good to buy something cheaper."Plummeting or marginal cheapness of shares - an occasion to reflect on the advisability of purchase.
potential stock speculator needs to develop its system of selection of the most promising stocks using technical analysis, and economic data on companies.
What is Exchange futures
Futures Exchange is also called the trade because trade is very material things: grain, metals, oil, meat, etc.At the conclusion of the transaction is fixed futures contract, according to which the buyer is willing to acquire in the future a certain quantity of goods at a fixed price.He brings to the broker (intermediary in the exchange) certain insurance deposit, which is called the margin.Thus, the buyer has guaranteed the transaction.The same margin is making and the seller.
Each futures contract has a settlement period, most often it is one, three or four months.During this time, the price can vary greatly, bringing significant profits buyers or sellers.Before physical delivery Now it comes in only 5% of all transactions, and that, provided that the contract did not lie to speculation.
Futures can be profitable much faster than transactions in shares.But the risks in such operations is much higher, because the need to predict the movement of prices for a limited time.
What is Currency Exchange
Forex market, in fact, is not an exchange, because there is no centralized control or uniform prices for execution.This is a big market where trades are major banks and dealing centers.Therefore, manipulation of quotes here is quite common.Yet there is a currency exchange.For example, a major Chicago-based CME Exchange offers its customers the ability to centrally trading major currencies, taking advantage of the all the guarantees and benefits of exchange trading.
Which tool to choose to trade - depend on the level of professionalism, seed capital and risk appetite of the individual.For example, the stock market - the most capital-intensive, but at the same time, the least risky, if you buy the stock for long-term investment.
In second place on the degree of risk is the futures market, as the first deposit there is much less, but the possibility of losing it is much higher because of the use of so-called "shoulder", which gives the broker.
most risky - the foreign exchange market as currency volatility, price changes around the clock and high "shoulder" increase the likelihood of losses up to 95-97%.
most important from stock market speculation, remember that investing in the stock market trading can only be the money that you are willing to lose, while not lowering the standard of living - and your loved ones.
