Before you open up an account with a brokerage firm and jump into trading, you should educate yourself about the different ways that you can invest your money so that you know what you are getting yourself into.
Options - An options trader speculates that a certain stock will trade higher or lower than a determined price within a specific time frame. The options contract is an agreement between two people to buy or sell at the predetermined price in the future. The reason it is called an option is because the buyer does not have to go through with the purchase. He can choose not to execute the option. Option trading is not for those new to trading. It can be very risky, but a trader can also accumulate large gains in a short period of time.
Futures - Futures trading is a type of trade where the investor speculates whether the price of a commodity will rise or fall. It is frequently referred to as commodities trading. It is an easy to understand type of trading and there are only about forty types of commodities in which you can invest. There is an enormous opportunity for huge gains in a short period of time. Of course, the potential for big profits exists because there is a risk for enormous losses as well.
Stocks - If you purchase shares of stock then you own a part of a company. If that company turns a profit, then you will see a gain in your investment. If the company loses money, then you too will lose a portion of your investment. As a stockholder in a company you will receive quarterly and annual reports on the company's financial strength. Shareholders elect the people who serve on the board of directors, so even if you own just one share, you still get one vote.
Forex - Forex is a foreign exchange market. Foreign currencies are bought and sold. The investor is speculating as to whether the currency of a particular country will go up or go down. Forex is one of the largest markets in the world with over two trillion dollars in trades done on an annual basis. The advantage of trading on Forex is that the market is open 24 hours a day. There is no bell to wait for in order to begin trading.
Currency trading - Currency trading occurs in a market where the currencies are traded against one another. All trades are done in pairs. The investor speculates that one currency will go higher than the other currency and then wait for the profit. Trades are carried out through a network of banks and online brokerage houses. It is a very liquid market.
Day trading - Day traders buy and sell stocks within a very short period of time, usually within the same day, but the trade can also be done within a day or two. The idea is to turn a quick profit and move on to finding other hot stocks.
Swing trading - Swing trading is similar to day trading, but the trades occur over a longer period of time, which can be a few days to a few weeks.
Penny Stock Trading can be the most lucrative form of making money in stocks. What other vehicle can make 500%+ in less than one month?
Learn to trade the correctly and you can make a fortune.
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