You probably hear it all the time. You hear it from your friends, you hear it from brokers, and you probably heard it being discussed on TV. What is stock trading and why are so many people interested in it? Stock trading is one of the most popular and the best money making business in the world.
In the financial market, the word trading means buying and selling. In stock trading, you buy a specific stock at a low price hoping you can sell it at a higher price. The value and the movement of the stock price is what it’s all about. You may have an idea what’s it like in the market floor. You probably saw it on TV or in the movies on how people trade stocks. You probably saw them shouting, talking on the phone while looking at the trading monitors, gesturing one another and entering data into terminals in a single trading day.
Now, you’re probably asking yourself why you want to trade stocks when you saw how chaotic it gets in the market floor every single day. It is a fact that trading in the market floor can be very exhausting and sometimes can be very confusing. To get you into a clearer view on what goes on in the market floor, here’s an example on why it gets so chaotic:
The first thing you do when you spot a trend is buy shares, you tell your broker to buy the particular stock in the market at a specific number of shares. The next step would be your broker sending the order to their floor clerk in the exchange. The floor clerk in turn will alert the firm’s floor traders. They will be the one who will find another floor trader who is willing to sell the particular stock at a specific number of shares. You must understand that floor traders know who owns the stock and who is willing to sell it.
The next step would be agreeing on a price and complete the transaction between the buyer and the seller. During this process, you will be kept informed on how the negotiation is taking place. You will be notified of the final price and after a few days, you will receive a confirmation in the mail. However, there is another way to trade. This is to trade electronically. An example would be NASDAQ. NASDAQ is like your trading floor but instead of doing the trades on the market floor, it does the trades via a network of computers.
These electronic networks automatically match the buyers and sellers instead of the traditional way via brokers. This is much faster and much more efficient than trading on the floor. This is why stock trading software is increasingly getting more and more popular for individual traders. If you are just a beginner or a seasoned stock trader, this kind of software can really work for your benefit.
This software automates trade decisions for you. You will be the one to set the trading system of the software in order to copy your trading style. With this kind of software, you automatically let the computer decide for you. It will detect trends and when the numbers are right, it will automatically execute the buy or sell decisions for you.
You can also be the one to operate the software manually and execute orders yourself. When buying stock trading software, you should look for the following:
• Stock ticker so you will have your own scrolling stock quotes in your computer screen.
• Real time stock market data streaming. To inform you what the current trend in the stock market is.
• Currency converter.
• Charting software to display market information in your computer screen.
Once you have all these, you can execute buy and sell orders right in your own home. Stock trading software is one of the easiest and the most convenient way to trade stocks.