Citizendia

A stock trader or a stock investor is an individual or firm who buys and sells stocks or bonds (and possibly other financial assets) in the financial markets. As commonly used, individual refers to a Person or to any specific object in a collection Generally a company is a form of Business organization. The precise definition varies Trade is the willing exchange of goods, services, or both Trade is also called Commerce. Software for Fixed assets management and Stock control developed in 2004. In Finance, a bond is a Debt security, in which the authorized issuer owes the holders a debt and is obliged to repay the principal and Interest In Business and Accounting, assets are everything owned by a person or company (all tangible and intangible property that can be converted into cash. In Economics, a financial market is a mechanism that allows people to easily buy and sell ( Trade) financial Securities (such as stocks and bonds

Contents

Stock trader versus stock investor

Charting is the use of graphical and analytical patterns and data to attempt to predict future prices.
Charting is the use of graphical and analytical patterns and data to attempt to predict future prices. Technical analysis is a Financial markets technique that claims the ability to forecast the future direction of security prices through the study of past market

Individuals or firms trading equity (stock) on the stock markets as their principal capacity are called stock traders. Software for Fixed assets management and Stock control developed in 2004. A stock market, or (equity market is a private or public market for the trading of company Stock and derivatives of company In Finance, a trader is someone who buys and sells Financial instruments such as stocks, bonds and derivatives. Stock traders usually try to profit from short-term price volatility with trades lasting anywhere from several seconds to several weeks. The stock trader is usually a professional. This article is about people called professionals For the Movie, see The Professional or Leon. A person can call himself a full or part-time stock trader/investor while maintaining other professions. When a stock trader/investor has clients, and acts as a money manager or adviser with the intention of adding value to his clients finances, he is also called a financial adviser or manager. A financial adviser is a professional who renders investment advice and Financial planning services to individuals and businesses In this case, the financial manager could be an independent professional or a large bank corporation employee. This may include managers dealing with investment funds, hedge funds, mutual funds, and pension funds, or other professionals in equity investment, fund management, and wealth management. A collective investment scheme is a way of investing money with other people to participate in a wider range of investments than those feasible for most individual investors A hedge fund is a private Investment fund open to a limited range of investors which is permitted by regulators to undertake a wider range of activities than other investment A mutual fund is a professionally managed type of collective investments that pools money from many investors and Invests it in Stocks bonds, A pension fund is a pool of assets forming an independent legal entity that are bought with the contributions to a Pension plan for the exclusive purpose of financing pension Equity investment generally refers to the buying and holding of shares of Stock on a Stock market by individuals and funds in anticipation of income from Wealth Management is an advanced investment advisory discipline that incorporates Financial planning and specialist financial services Several different types of stock trading exist including day trading, swing trading, market making, scalping (trading), momentum trading, trading the news, and arbitrage. Day trading refers to the practice of buying and selling Financial instruments within the same trading day such that all positions are usually closed before the market close Swing trading sits in the middle of the continuum between Day trading and Trend following. A market maker is a firm that quotes both a buy and a sell price in a Financial instrument or Commodity, hoping to make a profit on the turn Scalping, when used in reference to trading in Securities, Commodities and foreign exchange, may refer to (i a fraudulent form of Market manipulation Swing trading sits in the middle of the continuum between Day trading and Trend following. Trading the news is a technique to Trade Equities, Currencies and other Financial instruments on the Financial markets Trading In Economics and Finance, arbitrage is the practice of taking advantage of a price differential between two or more Markets striking a combination of matching

Stock traders in the trading floor of the New York Stock Exchange.
Stock traders in the trading floor of the New York Stock Exchange. The notion of "trading room" (sometimes used as a synonym of " Trading floor " is widely used in Financial markets to refer to the Office space The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City.

On the other hand, stock investors purchase stocks with the intention of holding for an extended period of time, usually several months to years. They rely primarily on fundamental analysis for their investment decisions and fully recognize stock shares as part-ownership in the company. Fundamental analysis of a business involves analyzing its Financial statements and health its management and competitive advantages and its Competitors and Many investors believe in the buy and hold strategy, which as the name suggests, implies that investors will hold stocks for the very long term, generally measured in years. Buy and hold is a Long term Investment strategy based on the concept that in the long run Financial markets give a good rate of return despite periods of This strategy was made popular in the equity bull market of the 1980s and 90s where buy-and-hold investors rode out short-term market declines and continued to hold as the market returned to its previous highs and beyond. However, during the 2001-2003 equity bear market, the buy-and-hold strategy lost some followers as broader market indexes like the NASDAQ saw their values decline by over 60%. The NASDAQ (acronym of National Association of Securities Dealers Automated Quotations) is an American Stock exchange.

Methodology

Stock traders/investors usually need a stock broker such as a bank or a brokerage firm to access the stock market. A stock broker or stockbroker is a qualified and regulated professional who buys and sells shares and other securities through Market makers or A banker or bank is a Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money Since the advent of Internet banking, an Internet connection is commonly used to manage positions. Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual Bank, Using the Internet, specialized software, and a personal computer, stock traders/investors make use of technical analysis and fundamental analysis to help them in the decision-making process. The Internet is a global system of interconnected Computer networks A personal computer ( PC) is any Computer whose original sales price size and capabilities make it useful for individuals and which is intended to be operated Technical analysis is a Financial markets technique that claims the ability to forecast the future direction of security prices through the study of past market Fundamental analysis of a business involves analyzing its Financial statements and health its management and competitive advantages and its Competitors and They may use several information resources.


Expenses, costs and risk

Trading activities are not free. They have a considerably high level of risk, uncertainty and complexity, especially for unwise and inexperienced stock traders/investors seeking for an easy way to make money quickly. Risk is a Concept that denotes the precise probability of specific eventualities Uncertainty is a term used in subtly different ways in a number of fields including Philosophy, Statistics, Economics, Finance, Insurance In general usage complexity often tends to be used to characterize something with many parts in intricate arrangement Money is anything that is generally accepted as Payment for Goods and services and repayment of Debts. In addition, stock traders/investors face several costs such as commissions, taxes and fees to be paid for the brokerage and other services, like the buying/selling orders placed at the stock exchange. A stock exchange, share market or bourse is a Corporation or Mutual organization which provides "trading" facilities for Stock According to each National or State legislation, a large array of fiscal obligations must be respected, and taxes are charged by the State over the transactions, dividends and capital gains. Dividends are payments made by a Corporation to its Shareholder members However, these fiscal obligations may vary from jurisdiction to jurisdiction because, among other reasons, it could be assumed that taxation is already incorporated into the stock price through the different taxes companies pay to the state, or that tax free stock market operations are useful to boost economic growth. A share price is the price of a single share of a company's Stock. A stock market, or (equity market is a private or public market for the trading of company Stock and derivatives of company Economic growth is the increase in the amount of the goods and services produced by an economy over time Beyond these costs, the opportunity costs of money and time, the currency risk, the financial risk, and all the Internet Service Provider, data and news agency services and electricity consumption expenses must be added. Opportunity cost or economic opportunity loss is the value of a product forgone to produce or obtain A currency is a unit of exchange, facilitating the transfer of Goods and/or services It is one form of Money, where money is Financial risk is normally any Risk associated with any form of financing. An Internet service provider ( ISP, also called Internet access provider or IAP) is a company which primarily offers their customers access to the Internet

Stock Picking

Although many companies offer courses in stock picking, and numerous experts report success through Technical Analysis and Fundamental Analysis, many economists and academics state that because of Efficient market theory it is unlikely that any amount of analysis can help an investor make any gains above the stock market itself. Technical analysis is a Financial markets technique that claims the ability to forecast the future direction of security prices through the study of past market Fundamental analysis of a business involves analyzing its Financial statements and health its management and competitive advantages and its Competitors and In a normal distribution of investors, many academics believe that the richest are simply outliers in such a distribution (i. The normal distribution, also called the Gaussian distribution, is an important family of Continuous probability distributions applicable in many fields In Statistics, an outlier is an observation that is numerically distant from the rest of the data. e. in a game of chance, they have flipped heads twenty years in a row).

For this reason most academics and economists recommend that investors invest in funds that follow an index in the market, i. e. long-term and well-diversified investments.

Dart Board Method

Financial journals and newspapers such as the Wall Street Journal have published articles on stock picking in the past. One famous article involved a stock picking contest among a panel of Wall Street experts, the public, and a dart board. Darts refers to a variety of related games in which darts are thrown at a circular target (dartboard hung on a wall One member was elected to throw darts at the Journal's stock page in order to select a portfolio. At the end of the experiment, the public and the dart board both beat the board of Wall Street experts. The dart board's triumph over the Wall Street experts can be attributed to chance.

Famous stock traders or stock investors

References

  1. ^ The Damn'd South Sea, Harvard Magazine (1999), accessed January 2007
  2. ^ South Sea Bubble, Stock Market Crash! (2006), accessed January 2007
  3. ^ FAMOUS FIRST BUBBLES? The South Sea Bubble, Erasmus School of Economics - Erasmus University Rotterdam (2006), accessed January 2007
  4. ^ The South Sea Bubble, History House Inc. Martin E Zweig (born 1942 in Cleveland Ohio) is an American Stock investor, Investment advisor and Financial analyst. Harvard Magazine is an independently edited Magazine and separately incorporated affiliate of Harvard University. Erasmus University Rotterdam is a university in the Netherlands, located in Rotterdam. (2006), accessed January 2007

See also

This article is about a trader who uses "day trading" strategies/techniques Fundamental analysis of a business involves analyzing its Financial statements and health its management and competitive advantages and its Competitors and Options are financial instruments that convey the right but not the obligation to engage in a future transaction on some Underlying security, or in a Futures A mutual shareholder or stockholder is an Individual or company (including a Corporation) that legally owns one or more shares of Software for Fixed assets management and Stock control developed in 2004. A stock broker or stockbroker is a qualified and regulated professional who buys and sells shares and other securities through Market makers or A stock exchange, share market or bourse is a Corporation or Mutual organization which provides "trading" facilities for Stock A stock market, or (equity market is a private or public market for the trading of company Stock and derivatives of company Technical analysis is a Financial markets technique that claims the ability to forecast the future direction of security prices through the study of past market Technical analysis software automates the charting analysis and reporting functions that support technical analysts in their review and prediction of Financial markets (eg In Finance, a trader is someone who buys and sells Financial instruments such as stocks, bonds and derivatives. Value investing is an Investment paradigm that derives from the ideas on investment and Speculation that Ben Graham & David Dodd began See also Stock market simulator Paper trading (sometimes also called "virtual stock trading" is a simulated trading process in which would-be investors
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