how to trade stocks
Before we start with the details, it is important to point out that when trading stocks in the traditional sense, you buy company shares in very small amounts. The more shares you own, the greater your stake in the company.

Shares are traded in thousands, and many shares are listed or not listed each time.

The value of the stock depends on a wide range of factors, including company fundamentals, socio-economic issues, geopolitical issues, inflation, unemployment, taxes and a host of other factors.

All these factors work together - often in opposite directions - to influence the share price of the company. But guesswork and perception are the two biggest drivers of stock prices.

The higher the number of people who expect the stock to rise or fall, the more likely the share price will move in a certain direction as the majority sees.

Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor. You’ve probably seen pictures of a trading floor, in which traders are wildly throwing their arms up, waving, yelling, and signaling to each other. The other type of exchange is virtual, composed of a network of computers where trades are made electronically.
The purpose of how to trade stocks is to facilitate the exchange of securities , reducing the risks of investing. Just imagine how difficult it would be to sell shares if you had to call around the neighborhood trying to find a buyer. Really, a stock market is nothing more than a super-sophisticated farmers’ market linking buyers and sellers.
Before we go on, we should distinguish between the primary market and the secondary market. The primary market is where securities are created (by means of an IPO) while, in the secondary market, investors trade previously-issued securities without the involvement ,it is what people are referring to when they talk about the stock market. It is important to understand that the trading of a company’s stock does not directly involve .