Share Trading Guide

The share trading market instantly conjures up pictures of wealth being created and lost. A "share" makes its owner a part owner of the company. Various types of shares, also sometimes referred to as stocks, have different rights associated with it. The main objective of share trading is to make a profit. If you are able to sell your share at a higher price than what you had paid for it, you make money.

However, it is important to remember that you are also incurring a risk every time you invest in a company share. As long as you are the share holder, you are entitled to a part of the company’s profits through dividends. Countless people have gotten rich through share trading but countless others have lost millions as well. There is no formula to be successful in share trading; every move you make has a risk associated with it.
How Is the Share Trading Conducted?

If you’ve never been involved with share trading before, then you’ll be surprised to know that buying and selling the shares by yourself is not allowed. To get an investment portfolio, you need to get the services of a qualified broker. Basically, there are two types of brokers namely the non-advisory broker and the full-service stockbroker.

The non-advisory broker will merely buy and sell according to your instructions. This type of broker charges lower fees because he does not provide auxiliary services. You need to conduct your own technical research and market research to find out which shares have the potential to become profitable. You can reach the non-advisory broker through phone or the internet.

Meanwhile, the full-service broker is called as such because this broker can provide investment advice and trade the shares on your behalf. Although this type of share broker charges higher fees, getting this service is worth considering. Aside from the fact that the broker will conduct the technical and market analysis on your behalf, you will also benefit from his market exposure, network contacts, and years of experience in the industry.

How Long Should You Keep Your Investment?
Depending on your financial health, the amount of investment you should put in the share trading should only be limited to the amount you can afford to lose. This is because despite all precautions, the share market is still very much volatile and unpredictable. It is important not to tie up all your money in share investments. Leave as much as possible in your savings, securities, and less risky investments.

There are two main types of investing in this market. The first is called the "Buffett-style of investing". In essence, you will keep the share because of its long-term potential rather than quick profits. The investor buys with the intention of keeping it for several years while enjoying the dividend. The other type of investing is to trade the shares quickly. Although buying and selling quickly is risky because the value of shares cannot be predicted in any given time, it is possible to make a fortune doing this.