Note: Stock Market trading is one of the riskiest businesses of all. You can either make money with this business, or you can lose all of it. Also, this business is not free to start: you will need to invest funds in order to do trading. If you are looking for online opportunities where no investment is required, then please go here:
Stock markets are the place where we can buy or sell shares of different companies. Nowadays we can do this work at home via online trading simulation software.
Using these software we can buy/sell shares in real-time. Such software shows the live rates of shares. Below is a screenshot of KASB Direct simulation software. Please note that: this software is the property of KASB Direct and that I am showing this screenshot only for information purpose.
In order to earn money from this business one needs to have some really good experience in stock trading. If someone wants to be successful in this business then lot of research is required. Remember: This business is risky.
If you are a new comer then you have a long way to go. Stock market trading is not an easily understandable business. People learn it in several years.
You will also have to learn lots of things. In the start, I suggest you only monitor the prices of shares and do not invest your money in any shares until you are 100% sure that your investment is in the right company.
Stock market business can be done during the trading hours of 5 working days every week.
How do you gain or lose money in the trading?
Let me explain with the help of an example:
Assume that I am doing this business and I decide to invest my money in a company called ABC Farms. At the time when I am buying the shares of this company the price per share is $10.
Now: How can you lose money?
After one month what if the price per share of this company decreases to $8 or $7 etc? If I sell my shares, I will get less money compared to what I invested when price per share was $10.
If I bought 100 shares for $1000 then I will only get $800 [$8 per share] or $700 [$7 per share].
For the same investment, what if the price per share of this company increases to $12?
Now if I sell my 100 shares, I will get $1200. So for a $1000 investment, I was able to make $200 [$2 per share] worth of profits.
In stock markets, we can also do future trading. In future trading, things work the opposite way: that is, instead of buying shares, you sell them. For this kind of trading if the share price goes up you will lose money and if the price goes down you gain money via buying the shares for low price.
In future trading you sell shares that you don’t actually own. You are just telling brokers to sell the shares in your name and that you will actually buy them [shares you sold] in the future.This kind of trading is riskier than the normal trading.
One other way to make money with this business is to investment your money in a solid company who is likely to give dividend to its shareholders. Dividend is part of the profit that companies make and is paid to share holders 1,2… times a year. When you buy shares of a company you are then entitled to receive a percentage of the profit. How much will you get? It depends on how many shares you hold and how much profit the company made and how much of this profit they are paying to their share holders.
What factors influence the share prices?
There are many things that can have a direct impact on stock markets. Some factors are:
Financial State of Listed Companies
What skills do you need to start stock market trading?
No special degree is needed but yes you will have to learn a lot of things. For new comers it is suggested that they first monitor the markets and try to learn about the factors that influence share prices.
People lose lot of money in this business so you need to be very careful. If you are not ready to take risks then my suggestion is to avoid this work: find some less risky business:
When you will carefully monitor stock markets and when you will keep yourself up to date with the latest political and other developments then you can be successful in this business.
Extreme patience is needed:
Have I ever done this business?
Yes: I have an account at KASB Direct and I trade in KSE [Karachi Stock Market] Pakistan. The screenshot posted above is taken from my account.
I have just invested little money in shares of few companies. And I also do day-to-day trading.
Have I lost any money?
Yes, I have lost quite some when I started this work. At that time, KSE indexes were high and there was lot of activity in the market. I invested in different companies and gained profits in the start. It was great and I started to investe more time in this business.
I lost money during some transactions but in the end the profits were more than the losses.
After few successful days of trading, KSE indexes suddenly crashed. We could not sell our shares as there were no buyers in the market. That crash resulted in a minus balance in my KASB Direct Account.
A relative of mine lost such a big amount of money that if I told you, you will most probably not believe it.
Why I am telling you this?
The reason is that you should not lose any money in stock markets like many new comers do. Do some other business if you are not willing to wait and learn. If you decide to start this business then you can get an online trading account. I suggest you open this account in a major internet based stock market service provider. Before doing any trade learn about the factors that influence share prices.