On Eagles Investors, we try to explain Stocks and trading online in a simplified manner. One needs to understand that, while most traders favour currencies in their trading activity, many others prefer to trade stocks for profit. It's important to emphasize that the choice of assets remains specific to the personality of each. If trading euro/dollar will make you happy, another trader will earn millions with the Netflix or Apple shares.
Stocks, another way to trade onlineEvery single Trader has his preferences. Stock trading has many nuances compare to currencies. And it's imperative to know before embarking on a trading platform. Get knowledge of the markets and the companies will help you to get better. For example, understand the interdependence between the share's price and the economic situation and perspectives of a company.
The Golden rules to know when trading StocksThe price of a share will depend primarily on investor confidence in the company. This will help him to decide to buy or sell the stock in question. And here are the main conditions that determine investor confidence in an action:
- The economic state of the business sector of the company (eg KLM shares fell in 2008 due to the global crisis in the civil aviation sector)
- Attractiveness and opportunities for growth in value (eg startups who see the price of their shares "multiplied")
- The financial balance sheet of the company
Trading stocks, following the trendWhile on currencies, the trends are often short-term and rather irregular, the stocks often have long tendencies that sometimes last for years. This is primarily due to a psychological phenomenon. If the currencies can be"shaken" by the instability of the economic measures taken by a country. Although the Stocks price can perfectly increase independently. Indeed, as long as "everything is fine" on the company site itself. Let's take Stocks example with Apple. As long as the iPhone is popular and well sold, the price of the shares will inevitably increase. In other words, the trend is primarily a psychological phenomenon: if investors believe in a company, the Stocks will climb up.
To successfully trade a stockYou must put yourself at the place of a shareholder. In other words, always ask yourself the following questions:
- Does this company have potential?
- Is the industrial activity concerned currently not competing or in crisis or in decline?
- Finally, do I have to "believe" and do I get enough knowledge in this Company?
Taking advantage of economic news: basics of trading
Every day you watch the news. Whether via an application on your smartphone, watching it on TV, or reading a newspaper. The economic news that is "the key" of the fundamental analysis. And the fundamental Analysis is the key to the success of trading stocks. Let's take the example of the Brexit. It's not necessary to be a genius or even a graduate from Oxford to understand that leaving England has a fundamental impact on the stocks market. All sectors of activities are concerned, every European bank and also companies that have partnerships or some interests with England. What will be the Apple stock after the release of the new iPhone? What can be the stocks of Shell, BP or TOTAL after the announcement of a new conflict in the Middle East and its impact on the Oil market? Finally, what will happen after a post on Twitter concerning the hire or the dismiss of the CEO of a big Company? Get updated on the news and you will get ready to be a Trader! Succeed in stocks trading depends primarily on economic news that has a significant impact on their value.