Find the best online stock trading brokers reviewed by Trading Pedia. You have probably heard this phrase thousands of times – ‘trading stocks’. However, the concept is slightly misleading, as you do not trade stocks like baseball cards, for example.
To trade means to sell or buy – this is the jargon of all those financial markets that you will probably explore sooner or later. It is often a mystery to people how a single system can handle all trading activity.
To be a good trader, you do not need to know every technical detail of the stock markets, but it is important to have at least a basic understanding.
Basically, there are two main ways to start trading:
On the exchange floor
Electronically
An interesting trend over the last few years is that more and more traders have switched their ‘platforms’ and decided to trade online. There are many markets, such as NASDAQ, that can be traded only electronically.
Leading forex brokers for stock trading
Trading on the exchange floor looks very similar to what you have seen on TV. As soon as the market opens, people start making telephone calls, rushing around, shouting, and so on.
Below is a short example of how to execute a simple trade, so you have an idea.
1. First, you tell your broker to buy or sell the option you want at the market.
2. Next, the broker’s order department sends the order to the floor clerk.
3. The floor clerk then alerts the firm’s traders, who must find another trader willing to buy or sell the number of shares you specified. This is actually easier than it sounds.
4. The two parties then agree on the price and complete the trade.
Of course, this is a simple example, and there are more complex trades that you will master in time.
Here are some brokers you can use for stock trading:
XM.com
Think Forex
eToro
Markets.com