Stocks can be purchased with market orders and stop market orders. When purchasing stocks with a market order, you will essentially trade at the best available price at that point in time. Be mindful that in fast moving markets, prices will rapidly change and therefore you may end up purchasing stocks at a different price to what you last saw. Stock market orders, on the other hand, refers to the selling of stocks using market orders. This means that a stock will only be sold when it reaches a predetermined price.
Trailing stops set price limits at which a stock can be bought or sold which help to prevent individuals from experiencing huge market swings. An upper and lower limit will be set as a percentage of the current price. Limit orders allow you to place a window around the price of your stock and they can then be bought or sold outside of this window. Placing limit orders helps you get achieve prices for stocks.
Markets are often referred to as either ‘bull’ or ‘bear’. The terms ‘bull’ and ‘bear’ refer to a rising market and falling market respectively. The primary market refers to the trading of new stocks while the secondary market refers to the trading of stocks that are preexisting.
Next
Step: Do you understand the market that you wish to trade in?
Before you begin trading stocks, you will
need to decide which market you would like to trade in. It is imperative that
you research the market before investing and continue to keep up to date with
market developments. Spend some time watching the market before you begin as
you will gain an understating of how stocks rise and fall.Before deciding on a particular company to invest in, it is worth reading the annual reports of each of the companies you are considering and assess their earnings, sales, debt and equity. Dig deep and look for any warning signs. Research their competitors too and ensure that you stay up to date with what all competitors are doing.