Last: 
Understanding Stock Trading
Stock trading is the activity of buying and selling shares in a company to help generate passive income from price changes. Traders are people who carry out trading activities where they try to observe short-term price changes in stocks carefully. Usually stock traders try to buy at a low price and then sell it at a high price. Stock trading brings quick profits for traders who can manage their time in the market wisely and carefully. Of course, not all of them make a profit, there is a downside experienced by stock traders. On the side of making quick profits, they can also fall easily. If you have money and want to dive into the world of trading, many online brokers allow you to trade stocks easily via your smartphone and computer at home. Before starting trading, it's a good idea to know how stock trading works by reading the article we made this time.10 Best Investment Applications in Indonesia and Trusted by OJK
Stock Analysis: Definition, Types, and Applications
History of the Stock Market
The idea of stock trading has actually been around since early civilization. Early businesses in civilization pooled funds by taking ships across the ocean from one country to another. Throughout the Middle Ages, merchants traded and exchanged goods with other countries from all over the world. Because traders came from other countries, buying and selling activities began to require a means of payment in the form of money to make trade transactions run safely and fairly. Modern stock trading was first discovered in Amsterdam, Netherlands when the East India Company became the first public company. In order to raise capital, companies had to make decisions by selling existing shares and paying the company's profits to investors in those shares. In 1611, the Dutch stock exchange was successfully established, and for many years, the East India Company was the only trading on the stock exchange. Because this company was successful, many other countries tried to follow suit by creating similar companies or companies, buying shares was the most popular activity for investors at that time. However, disasters began to occur when investors began to be uncontrolled in buying companies and did not first investigate the organizations they were investing in. Until finally, in the 1720s, this resulted in financial instability. Investors were scared and tried to sell their stocks, but none were sold, causing the market to collapse. Other financial scandals followed in England shortly after the East Indies incident. Although the stock market was dim and investors were worried, they began to get used to the idea of stock trading.9 Types of Investment Risks That Investors Should Know
Stock Trading Basics
Some of you who are learning stock trading must be wondering how the stock market works, right? You don't need to go too far to learn about stocks because the stock market usually facilitates the buying and selling of stocks between institutional investors, individuals and companies. For example, you want to buy Microsoft (NASDAQ; MSFT) shares, immediately press the "buy" option through the official website of the broker you have, you can buy shares that have been decided to be sold by other investors, not through Microsoft itself. By buying a share, you have become an investor in the company. There are three terms given to stocks for you to know so that they are not misunderstood. Consisting of stock market, stock exchange and stock index.- The stock market, the process by which investors buy and sell shares to each other.
- Stock exchange, an intermediary connecting buyers and sellers, for example NYSE (New York Stock Exchange).
- Stock index, a group of stocks used to track their collective performance.
How are Prices determined by the Stock Market?
There are many drivers that can push market prices up and down. For example, the stock market downturn that occurred in 2022 caused depressed inflation, rising interest rates, and concerns about inflation to become the main factors in the worsening market performance. However, in the end, these factors are what caused more investors to sell their stocks than buy them. Conversely, if there are more investors selling their stocks, then the market price will certainly fall. How It Works When Buying Stocks What happens when you successfully buy stocks? As an investor, you must buy and sell stocks through your broker. In short, a broker acts as a licensed entity to help you trade stocks on the stock exchange. The broker will tell investors what to buy or sell. When you buy a particular stock, it will be explained simply as below:- You tell the broker what shares you want to buy and how many shares you want.
- Your broker conveys information or messages to the stock exchange, and in this case the market maker will sell your shares based on the current market price trend.
- The shares will then be sent to your account.
Stock Trading Benefits
Stock trading has two types, namely individual stock trading and institutional stock trading. Individual traders will carry out stock buying and selling activities through brokers. Meanwhile, most institutional traders or traders will be employed by investment companies. Stock traders provide the company's ability to pay debt obligations (liquidity) to the stock market, and use several tactics to determine the strategy they will take. Stock traders are different from stock investors, stock traders basically only sell securities, while investors are stock actors who use their personal funds to buy securities. The goal of the stock investor itself is to get interest or profit from the increase in value (capital gain).Learn Stock Trading
Below are tips or ways to become a stock trader for beginners:- Learn about stocks, by recognizing and studying the types of risks and profits of stocks, then you will understand what profits and losses you will face in the future.
- Choose a securities company, it is better before doing stock trading, you must first choose which securities company you will choose. Choose a securities company that provides stock trading services or a company that has low prices.
- Learn the online stock trading application, by studying the features of the stock trading application, you will understand how to analyze, top stocks and understand other terms.
- Small capital first, stock trading will be profitable if investing with large capital. However, for you beginner traders, you should start with a small capital first, because this minimizes your losses in stock trading.
- Do stock analysis first, you must do stock analysis when you are going to trade stocks. When you understand this, then of course you have the right tactics or strategies to determine when to sell or buy stocks.
- Buy stocks when the price drops, try to buy stocks when the price is low or has touched the support point. Why is that? It could be that when you buy stocks when the price drops, it is likely that the price of the stock in the future will be high or increase.
