Stock Trading – Modern businesses can hardly imagine how they would function without stock trading and stock markets. Stock trading has been evolving rapidly even in the past few decades. Since these constant changes, stocks trading has become very different from decades, decades, or centuries ago. This evolution is only natural considering that stock trading is an essential component of modern business and economics.
HOW DOES STOCK TRADING WORK?
Buying and selling stock is the process of making money by buying and selling company shares. To determine if a company listed on a particular stock exchange, like the New York Stock Exchange, was worth investing in, stock traders and investors would research that company. You made a profit if you sell the stocks at the new price if you bought the stocks at a lower price.
A common misconception regarding stock trading is that it is only for high-flying business people or intellectuals. A person can, however, trade stocks regardless of their financial status. Investing some of one’s own money in stocks is easier than ever in the modern computer age when everyone on the street can do so readily.
When it comes to stock trading, it is advisable to create a sensible plan before you get started. Find a creditable stock strategy for first-time investors, which will aid you in making sound decisions when you invest in stocks. You will learn how to research companies and manage your stock portfolio by following a sound strategy.
HISTORY OF STOCK TRADES
Stock exchanges date back to the 1500s in Antwerp, Belgium, when the first stock exchange was established. Despite trading not in stock but shares of companies, this exchange set the stage for current conversations we are familiar with and certainly paved the way. East India Company was the first publicly-traded company in 1602 where you could buy stock.
Interestingly, you would buy and sell stocks at coffee houses in those early days of stock trading. In the years that followed, many stock exchanges were founded, including those in London and America. 1817 marked the founding of and the London Stock Exchange. Stock trading as we know it today arose from this model.
A central trading floor provided a central place for traders to work to buy and sell securities personally. It was a boisterous experience to trade in this manner. To make the trade official, paperwork had to be completed manually.
A DIGITAL AGE FOR STOCK TRADING
Computer technology has played an integral role in the evolution of stock trading in modern times. To trade, stock traders do it from their desks rather than being physically present on the floor of a stock exchange. It has also resulted in faster order executions, fewer errors, and faster researching of company news and information. Some would argue that the digital revolution has also led to an increase in stock exchange volatility and a change in the strategies used to trade stocks.
\The average trader now holds his stocks for shorter periods than he did in the past. He often buys and sells in one day or quarter. Increased activity may lead to an increase in market volatility because more trades are being conducted. You are more likely to hold onto stocks for fewer days as a stock trader now that you have more access to news.