Share Trading
If you aren't aware: there are stocks in the sharemarket that are very volatile and have their share prices double of halve in the short term.
There are stocks on the Australian Sharemarket that readily double or halve in value the short term. Better yet, there are traded financial instruments that are linked to the volatility of the larger valued stocks which also are highly volatile. The former are simply vanilla stocks. The latter example relates to derivatives, namely warrants and Exchange Traded Options (ETO's).
The truth and nothing but the truth about trading the share markets or any other markets for that matter: I was talking to a colleague earlier today about share trading. We discussed why prices go up and down, how traders make and lose money on the markets - especially how I’ve made money and lost money in the markets as well as share trading as gambling. Share trading is another opportunity out of so many out there to make money. To experienced traders, the money is there for the taking. For brokers, dealers and market makers it is a growth industry worth investing in, with market makers like CMC Markets and IG Markets expanding rapidly worldwide and banks like Macquarie starting to deal products like CFDs and rumours that ComSec may join in. But in our discussion we came to one interesting conclusion. That conclusion was that trading shares isn’t really productive. Trading shares doesn’t create anything useful: it is simply a transfer of ownership and funds from one party to another.
With the ASX All Ordinaries hitting all time highs today to 5272.1 and ASX reporting a huge increase in net profits due to the increased levels of share trading, it is important to step back a little and have a look at the bigger picture every now and again. I was surfing around the web when I stumbled upon a Lebanese news website called Dar Al-Hayat. It had an article titled "The Impact of Share Trading on the Household Spending Behaviors" by Fouad Sadek Mufti - a former Saudi ambassador. Lebanon is a world away from Australia and other Western cultures and it totally apparent in this Business opinion column. While IMF reported the best growth in three decades, in Australia we saw our markets boom as a result of the Resources sector, the share trading boom is also occuring in Lebanon.
The market is always right. If you are a practicing professional trader that phrase has probably been run past you a few times already. But we always need a reminder. No one is perfect. We all make mistakes, its part of being human. Trying to take revenge on the market for blowing a large chunk of your trading float is normal. In the course of your share trading you may have held on too long to a stock or too short. The thing is we can never pick out the tops and bottoms. We are only there for the ride. We hitch a ride on the trendline and get off once the trend has finished.
You may have heard of traders making a killing on the markets or traders getting killed over their financial balances in the stock markets. You may have thought that the stock market was a place to make a fortune. Or you may have thought the markets were too risky. But the fact is more than half of the Australian population have a direct or indirect ownership of shares, either through direct ownership, derivatives or through managed funds and superannuation. And a growing number are share trading with the boom of internet brokerage, information accessibility and the boom in financial services and awareness. Share trading may be a dream job for some, having unlimited freedom; no bosses. But trading stocks for a living is not easy.
You must be a professional trader or a budding trader if you're reading my first blog entry here on this website. Curiosity probably brought you here. A simple Google search and a few clicks probably brought you to this website. You probably wanted to find out a little bit more about trading or some sort of news to use as a part of your trading the markets. If you've come here to find out some hot tips - well you won't hear anything from me. You may hear some tips from other people but not me... Why?
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