The first steps for a beginner in the stock market is choosing a stock trading strategy. Financial educational program
In the West in all developed countries children are taught about investing in stocks at school, instilling financial literacy and talking about the structure of stock markets. In our country, this practice is not used, as a result of which most of the citizens, in the old fashioned way, rely at best on themselves, and at worst, on the government. As a result, pensioners are often left without proper means of subsistence, while if they had started investing in securities in advance or trading them on the stock exchange, then there would be no such problems. In this regard, we will try below in short form describe what is the work of a trader or investor on stock market Russia, Europe and USA.
Let's start with the basic concepts to lay the foundation for the knowledge of how to make money. At the same time, it should be noted right away that working with securities is far from what Forex offers, however, the mechanisms of operation of both of these structures are similar in general concepts. See also - . If you study the statistics, then there are many stories of dizzying success and high-profile failures both in Forex and stock markets, so when choosing, you should understand that working on the stock exchange itself does not guarantee success. But still, the conditions here are more honest in comparison with Forex, especially when it comes to working with big money.
Basic concepts
The stock market is an organized system of interaction between buyers and sellers. valuable papers. At the same time, there is a primary and secondary stock market. At the first, as the name implies, the placement of securities that are just beginning to be traded on the stock exchange takes place, and the securities already enter the secondary market after they begin to be resold.
Not only securities are traded on the stock exchange, but also other financial instruments. The work of stock exchanges is aimed at ensuring the movement of capital between individual entities. The value of the company's shares, and, consequently, their capitalization is determined here, which is important for both the investor and the trader to understand.
Who trades on the stock exchange
For those who are only interested in how the stock market works and begin to learn the basic material, you need to name the market participants:
- issuers are legal entities that act on behalf of the state. Their task is to raise funds through the launch of securities into circulation and the fulfillment of obligations on them;
- investors are individuals and legal entities engaged in the purchase / sale of securities for various purposes;
- professional participants are individuals and legal entities that legislative level obtained the right to work in the stock market. This category of persons includes dealers, brokers and others.
Types of securities
As already mentioned, not only shares are traded on the stock exchange, but also other securities and other financial instruments. To work professionally as a trader in the stock market, you need to know the main types of securities.
Can act as securities as a separate financial document, and conventional electronic designation. In both cases, the possession of this instrument is accompanied by a guarantee of property rights for the owner in relation to the person who issued the security. These types of securities are traded on the stock exchanges.
- Shares are a share in the company, which gives the right to expect to receive profit from the results of economic activity in the form of dividends. Ownership of shares also gives the right to manage the company to a certain extent. The same company can issue two types of shares - ordinary and preferred. The difference between them is that holders of preferred securities receive fixed dividends, but do not have the right to participate in shareholders' meetings and influence decisions on the company's work.
- Bonds are a type of debt with a fixed income. To put it simply, when buying a bond, it new owner lends money to the state or the company that issued it.
- Derivatives, which are also called derivative securities, provide the right to buy / sell shares, bonds, goods on certain pre-agreed conditions. The derivatives are futures contracts on various assets, options, etc.
To determine the global trend for the securities of a particular stock market, stock indices are used. For example, to work on the US stock market, you need to focus on the S&P500, Dow Jones. For the shares of German companies, the reference point is the DAX, for the Russian MICEX index (MICEX), for the London Stock Exchange, the guide is the FTSE100, and so on.
How to make money on the stock exchange
Working in the classic view of the stock market is nothing more than investing in the long term. It's about about deposits for time periods of a year or more. This approach has a number of advantages, and in order to evaluate the main ones, it is enough to look at the behavior of stock or sectoral indices. By investing for a long period of time, you can save a lot of money, which is difficult for those who prefer to work within the day.
Getting started on the exchange, you should get acquainted with diversification, that is, with the distribution of funds between individual shares. This is required in order to protect yourself from possible troubles if suddenly one or more securities begin to behave in an unpredictable way.
Properly using diversification and investing for the long term, the investor allows himself to smooth out market fluctuations, limiting their negative impact, which helps to significantly reduce risks and increase profit potential. As a rule, margin trading is not applied when investing, that is, they are not involved borrowed funds and work solely at their own expense.
When making a decision regarding long-term investment, regardless of whether a stock is bought or sold, it is important to rely on fundamental analysis methods. However, technical analysis is also a significant help, since it determines the most favorable moment to enter or exit a position.
IN Lately short-term trading with intraday work, when positions are not transferred through the night, has become very popular. This is the most risky trading style, since in order to get a significant profit, you often have to take risks, use signals that are not always accurate over a short distance. technical analysis and subject yourself to a great psychological burden.
For scalping, leverage is always used to increase the size of the position in order to obtain significant profit figures. reverse side there will be increased risks, which are extremely important to control and constantly commensurate with the profit potential.
How to get started
On the technical side, the work of modern investors and speculators in the stock market today is extremely simple, since uninterrupted Internet and functional software guarantee stable communication and accurate execution of orders almost instantly. Harder to pick up optimal strategy, which will suit the psychological type of the trader and give a sufficient number of accurate and understandable signals. When choosing a strategy, you will have to immediately determine what kind of forecasting will be used in the work - based on technical or fundamental analysis.
The use of the fundamental forecasting method is based on knowledge and understanding of economic laws that affect the price of financial instruments. The application of technical analysis is based on mathematical and graphical patterns. At the same time, special knowledge is required for successful work, which is why stable profits in the stock market can be received by ordinary people without special training.
However, in order to correctly compose a portfolio of stocks in compliance with the principle of diversification, you will need to take into account many different factors. It is not enough just to take a training course, of which there are many now, here a lot depends on the experience of the trader/investor himself. Therefore, it is extremely important to start work without focusing on large amounts of profit. At first, it is extremely important to work with small volumes until you gain confidence in your abilities.
Recently, many sensible books have been written on working in the stock market, so there will be no shortage of information. But theory is theory, so when starting practice, among other things, it is important to regularly work on mistakes, constantly analyzing successful and unsuccessful trades in search of conditions that will help in the future to make more profit on the first and incur less losses on the second. Working with profit in the stock market with the accumulation of experience becomes something completely natural.
Moreover, it is important to immediately develop the right attitude so as not to perceive the activity on the stock exchange through the prism of profit and loss. It is much more correct to look at it through the prism of right and wrong actions. As one of the founders of SMB Capital said, you just need to make one good trade, and then another and another one. And it doesn't matter if each of them closes with a profit, since a loss on the correct trade is not critical, because in the long term profit will be guaranteed! But if you deviate from your rules and recommendations of the strategy, making thoughtless trades, then you should not rejoice at the profit, because with this approach, sooner or later, the account will be drained.
Trading in the stock market is one of the types of income generation on the Internet. There are a large number of stories around such earnings, many of which relate to the aspect that stock trading is a scam. This can be refuted by a story from the life of a pensioner from Germany named Ingeborga Motz. A woman, trading on the stock exchange, was able to earn a million at the age of 75.
Three categories of newcomers to the market
All people who have turned their attention to the stock market can be divided into three groups. The first group includes traders who view the market as a gambling environment. They believe that working on it does not require effort, but at the same time it will not be able to bring a large amount of profit. Often they turned their eyes towards the securities market because of the stories of brokers who want to get new clients.
The second category includes people who have knowledge about finance, investments and stock markets. Their decision to try their hand at trading was considered and considered. Such people often lose a certain percentage of their initial capital due to poor training in trading in the stock market.
The third group are people who are serious about the process of making money. They studied this type of work in detail before making their first contribution. Most of these people remain potential traffickers, because in the process preliminary analysis market scare them possible risks trading, so they decide to stay out of the stock market.
Advantages of online trading
Online trading has a number of advantages. The most important of them is the possibility of obtaining a stable income. Also, these receipts can be formalized. Like all types of work on the Internet, trading in the stock market does not require any extra effort. A trader can earn while sitting in his apartment.
Another advantage is mobility. A trader can quickly sell his securities if they start to fall in price. This is done in order to keep losses to a minimum.
The stock portfolio is formed at the discretion of the trader. Issuers can be disposed of immediately before they begin to incur significant losses.
scalping
Scalping is one of the most famous and popular trading strategies in the stock market. It belongs to the category of speculative and is used on short timeframes. The essence of the strategy is to close the deal as soon as it starts to make a profit. At the end of the last century, the duration of the transaction was several minutes. Nowadays, in order to close it, a trader needs a couple of fractions of a second.
To apply this strategy, the following conditions must be met:
- highly liquid instruments;
- small spread;
- low volatility;
- low commission.
Each transaction brings no more than 20 points of profit. Significant income is provided by opening a large number of transactions. It is very important to learn about exchange and broker fees before using a scalping strategy in the stock market. It is necessary that the level of profit exceeds the amount of fees.
There are three scalping methods: impulse, classic and hybrid. The first type involves a permanent assessment of markets and financial instruments. When trading on the Russian stock market, a trader must follow the movement of American and European futures, as well as the US dollar and oil. The second method is to determine the difference between supply and demand, which can cause quotes to move. The third type of scalping involves a combination of the two previous methods.
swing trading
The basic principle of this strategy is to trade stocks in the direction of a long-term trend. However, it is necessary to start trading only in the case when a number of transactions have gone in the opposite direction.
One of the most reliable options to open a position is to open on an uptrend after a selling wave. After on downtrend there is a series of purchases, it is necessary to open a short position.
day trading
This is another type of speculative trading strategy in the stock market. It got its name due to the fact that all transactions must be completed within one day without transferring transactions to the next session. Using day trading, a trader can hold financial instruments for a period of several minutes to several hours.
For transactions that are carried out intraday, technical analysis is characteristic. Also, market participants can apply margin trading in order to increase your income. However, as returns increase, so does risk.
Investors
These are stock market participants who prefer holding financial instruments (as opposed to speculators). They do not take into account the fluctuations that may arise, as they believe that over time their patience can pay off.
All investors can be divided into three types: long-term, short-term and medium-term investors. The former invest their money in shares of promising companies for a period of twelve months or more. They use fundamental analysis and take into account the economic and political situation in the state.
Short-term investors hold financial instruments for a couple of weeks. In order to analyze the chart, they use daily and hourly time intervals. Medium-term investors can hold shares for up to twelve months. They work on daily and weekly timeframes and use both fundamental and technical analysis.
How to start trading
First of all, it is necessary to determine the minimum amount Money for trade. You should not immediately deposit a large amount of money, as the sad experience of many traders indicates that the first steps in the stock market most often bring losses.
Then you should be trained in the basic concepts and principles of trading in the stock market. For novice traders, there are a large number of special textbooks that describe the main aspects of working with the market. Before you start trading, you need to familiarize yourself with such two concepts as fundamental and technical analysis. The first deals with the study of real factors of a political, economic and psychological nature that can affect the quotes of financial instruments. As for technical analysis, it studies the movement of quotes using charting. Its purpose is to predict changes in quotes using mathematical techniques.
The next step is to choose a broker for trading in the stock market, since it is very difficult to gain access to transactions without their help. That is why everyone who wants to make a profit by trading on the stock exchange resorts to the services of intermediaries, which can be not only brokerage companies but also commercial banks. The main points to consider when choosing an intermediary are the reliability and the amount of commissions required to be paid when making transactions, withdrawing funds and maintaining the account.
Next, you need to install the terminal. There are a large number of platforms for trading in the stock market. On the intermediary website, you need to download a special application that will provide access to the market. Before you start trading, you can get training using a demo account. It allows you to fully master the operation of the terminal and create your own strategy that can be used when trading using real money.
Platform selection
This is one of the most important steps in getting started in the stock markets. A similar transaction can bring different profits to a trader on different platforms. There are four main criteria for choosing a broker:
- convenience;
- functionality;
- availability of access to the exchange;
- amount of commissions and fees.
These characteristics are basic, but not the only ones. Each trader has his own list of platform requirements that he has developed during his trading career.
According to the versions of many specialized publications, the best platform is Screen Market Systems. It provides a wide range of functions, providing high-quality and convenient work.
rules
Professional traders have developed several rules for trading in the stock market, which must be followed not only in order to make a profit, but also in order to minimize losses.
The first rule is not to go all-in. A trader does not have to risk all his capital. Stock trading in the stock market requires the right approach and informed decisions from the investor. It is not recommended to trade either with borrowed money or with those funds, the loss of which will cause big problems for the trader. Quotes can move sharply either up or down. This often leads to loss of capital. Especially among newcomers to the market.
The second rule is cutting losses. Every merchant must control his greed. It appears in those cases when the transaction begins to make a profit. The most important mistake of a trader is that he completes the operation before it can earn maximum income.
The last rule is to allocate risks. You should not invest all your money in one instrument in pursuit of super profits. In order to reduce the risk of losing capital, you need to form a portfolio using different securities.
What not to do
Every minute in the market there are many new options to earn money. It is important to remember that you cannot get all the money. Therefore, it is better to concentrate on one big transaction than to spread out on many transactions that will more likely cause you to lose money than to increase it.
Also, one should not buy financial instruments, the value of which is falling, in the hope that they will become more expensive. Such a strategy gives a positive result very rarely. In the long run, this will cause big losses.
Stock Market or Forex
Trading in the stock market is much more difficult than working in Forex. The difference between them is that in the first case, trading is carried out with shares and other securities, and in the case of Forex, currency pairs act as financial instruments.
The disadvantage of the stock market is a small currency leverage. This means that traders with small deposits are less likely to make successful trades. Forex is a volatile market, where you can earn more in a short period of time than in the stock market, which is focused on long-term investments.
I.Q. Review continues the series of articles “Financial educational program” about making money on shares. Readers have already mastered the basic terms of the stock market and learned how to open your own brokerage account. Move on. The topic of today's publication is how to get started in the stock market: how to decide how much money to invest in stocks, and what trading strategy to choose for a beginner in the stock market.
How much to start investing in stocks
So, you have just opened your first brokerage account and you are about to deposit money into it. But how much money to put, you have not yet decided. The first question to ask yourself is how much to start trading stocks with?
To answer it, you need to estimate the desired potential result and correlate it with overhead costs. Adequate expectations - a yield of 1.5-2 times more than a bank deposit protected by the Deposit Insurance Agency could bring (funds on brokerage accounts are not subject to the deposit insurance law, the DIA will not return anything to you in case of loss). Expected higher returns come with a cost in terms of risk. With today's high stakes on bank deposits, you can lay the expected return on investment in shares at the level of 25% per annum.
A part of your income will be “eaten up” by the brokerage and depository commission, and the state will take a part in the form of taxes. Since 2015, a single taxation rate has been applied for profits from trading in shares and income from dividends. In other words: from the difference between buying and selling, you will pay 13%. From received dividends - also 13% . These are all taxes that the state takes for itself, no other taxes are required to be paid. If there is no income, no tax is payable. The broker withholds taxes automatically in most cases, you do not need to do anything special.
Broker also wants to eat
In addition to taxes on shares, there is a brokerage commission and a fee for the work of the depository (monthly subscription fee, or for the accrual of dividends, for example). You will learn it from your tariff plan. Therefore, the “gross income” should be higher than the 25% pledged. We can safely pledge 30%.
We figured out the relative profitability. The next interesting point is the absolute value of profit. From practice, we can say that, having earned 30 or even 50 percent per annum on shares, you will not be satisfied if it is only 5-10 thousand rubles. Indeed, so many nerves for 500 rubles a month - is the game worth the candle? In addition, the broker's tariff plan may contain an adjustment for the minimum commission amount per trade, which will negate income from small transactions.
We believe that the optimal amount to start in 2015 should not be less than 150 thousand rubles. . This is not too little - enough to feel the profit. With a profit of 10% of this amount at the end of the year, you can buy yourself good clothes. On the other hand, this is not too much, but you do not risk losing capital, earned with great effort over a lifetime. We categorically do not recommend immediately depositing amounts of a million rubles or more into the account. Losing even a small part (as a percentage) of such capital will discourage you from investing for a long time.
Oleg, entrepreneur:
“Three years ago I invested a million rubles in blue chip stocks. The money was not the last, but the amount is significant for me. Every day, as if spellbound, I followed the change in quotes, I was nervous when the stock market fell by 3%. In general, it causes a certain dependence. A year later, I withdrew the money, earning 150 thousand rubles. At the same time, he saved up in dollars, but had to invest in rubles, the dollar grew approximately in the same period. It seems that nothing has worked, it turns out.
It was very disappointing that I sold Aeroflot shares the day before the start of strong growth, and held them for six months. I don’t want to invest more, it distracts me from work a lot, and I’m too old to be so nervous.”
Before investing in stocks
We figured out that to begin with, you need to invest an amount of about 150 thousand. Now it remains to decide what to do with it. To do this, you need to develop a trading strategy. This cannot be done without knowing the basic concepts. So you'll have to read another boring introduction to terms.
Internet trading - a set of actions for buying and selling shares on the stock exchange in order to profit from the exchange rate difference from a home computer through a special program (trading terminal).
Types of trading by position holding period:
- Scalping or Pipsing - an attempt to catch the slightest change in the stock price by one minimum size quote movement (tick or pip). It is carried out using a specially written (independently or under the order of a programmer) trading program that operates according to a certain algorithm - otherwise it is called algorithmic trading. Example: the share price is 100 rubles. You bought it at 99.99 rubles and put it up for sale at 100.01. The minimum available difference between the purchase and sale prices on which such earnings are based is called spread. Since you won’t earn anything from one tick, this type of trading is carried out on the basis of constant repetition of operations and refers to high frequency trading .
- intraday- an attempt to make money on a change in the stock price within a day. For example, you bought shares at 100.08 rubles in the morning, and by the evening they cost 100.77 rubles apiece. You sell and “move out”. For one trading day minus the commission earned 0.5% of the account. If you repeat the operation every trading day, you can earn 100% per annum and much more. The problem is that it is impossible to guess the direction of the stock price movement every day. And with the probability of guessing 50/50, the broker's commission is constant and works against you.
- Short term trading - an attempt to catch 3-5% of the course change. Typically, a time period from a day to a month is used. If the course quickly and confidently goes not in your direction, a loss is fixed by “getting into money”.
- Medium term trading - an attempt to catch a significant movement in the stock price - from 10%. This may take weeks or even months. Small fluctuations in the course against your position, as a rule, are ignored “until the victory”.
- Long term investment - the purchase of shares, not having the goal of selling them for at least six months, and as a maximum - in general, in order to leave them as a legacy. Long-term investments in shares in most cases involve the receipt of dividends. Dividends can only be received by being on the list of shareholders on a certain day of the year - on closing date of the register of shareholders .
In addition, the long-term differs from all other types of stock trading extremely significant point: investors only play long!
Long— buying shares with the aim of selling at a higher price in the future.
Short- artificial financial transaction. Selling shares borrowed from a broker to buy them at a lower price in the future.
Our articles are designed for beginners in the stock exchange and are built on the principle “from simple to complex”. Therefore, if you do not really understand the above - it's not scary. In the next issues of "Financial Educational Program" we will talk ONLY about long-term investment in stocks.
Long-term investments in stocks and types of investment analysis
A penny saves a ruble
We would like to draw your attention to the fact that in order for a beginner to start making money on the stock exchange, you first need to master the basics. The base is a long-term investment in stocks. To invest successfully, you need to work out your own investment strategy. The strategy should be based on the analysis carried out. There are 2 types in trading investment analysis— technical and fundamental.
Technical analysis - analysis of the stock price movement chart with the assumption that all other factors are already included in the price.
Fundamental analysis — analysis of the indicators of fresh economic and financial statistics within the company, in the industry and in the market as a whole in order to make an assumption where the price will go in the future.
Technical analysis of stocks is an extremely controversial thing, we will talk about it in a separate article. The basic type of analysis for the correct formation of an understanding of the stock market for beginners should be fundamental. Long-term investments in shares should be formed on the basis of the conducted fundamental analysis.
In this way, three main conclusions we get :
- Starting to invest in stocks costs from 150 thousand rubles.
- You need to learn how to invest money for the long term - this is a basic approach that will allow you to painlessly master others when the time comes.
- In the primary choice of stocks, it is worth relying on fundamental analysis - that is, on the indicators of the company's economic statistics, and not on the price chart.
Initially, the editors planned to analyze in this part of the cycle how to choose stocks. But the material turned out to be too long, so we will talk about the technical tricks of applying fundamental analysis in the next part. Keep for updates.
Modern trading exchanges- important link market economy. These legal entities act as intermediaries and regulators, ensuring the stable operation of various financial instruments.
The main tasks of exchanges are the organization and ordering of various markets ( stocks, currencies, commodities, securities, metals, etc.) to maximize the simplification of trading processes, as well as balancing the balance of supply and demand. In addition, the exchange exercises control over the trustworthiness of participants, protecting both sellers and buyers from the risk of running into scammers.
This diagram clearly demonstrates the basic principle of the exchanges.
How to start studying trading on the stock exchange - choosing a field of activity
- stock exchanges. The main direction of their work - operations with securities. Among them, the most popular are stocks and bonds.
- Currency exchanges. These exchanges are used for buying and selling national currencies. The main goal is to redistribute foreign exchange flows between various sectors of the economy and maintain the real market exchange rate.
- Commodity exchanges. They are a kind of international wholesale market for goods, operating on the principles of free competition. Everything is sold here - from raw materials for heavy industry to food products. Commodity exchanges are both general and highly specialized.
- Market of derivative financial instruments. His main activity is working with futures, options, etc.
Despite the common misconception that it is difficult, this is the simplest thing that can be on the exchange, and for a beginner it is much easier foreign exchange market Forex.
Derivatives market (contracts with an expiration date - options, futures) is considered the most complex tool on the market. Basically, it is here that there is an active trading of futures for commodities, as well as stocks and currencies. But this branch of the exchange will require higher amounts to start and more knowledge, otherwise you will be haunted by huge risks of losses.
How to start trading on the stock exchange - an overview of the main platforms
Currently, there are dozens of large exchanges in the world that operate in a variety of directions. However, for an inexperienced investor who is just starting to learn the basics, it makes sense to focus only on the largest of them.
NYSE
The largest stock exchange in the world and at the same time a symbol of the financial power of the United States. It is profitable to trade, so it attracts businessmen from all over the world. Currently, about 2,800 companies are participating in trading on the stock exchange, and in the bulk these are “ blue chips ". The NYSE is jealous of its reputation, so only reliable and strong stocks are allowed to trade here.
NASDAQ
It is also one of the most attractive stock exchanges in the world. Specializes primarily in stock trading Hi-Tech enterprises. How to get here? To do this, you need to find a local broker with access to .
Russian Stock Exchange
Of course, the guarantees of the decency of the participants here may not be as high as on the same NYSE, but there is definitely a place to roam. Operations are made with shares of exchange-traded funds, options, futures, currencies, securities, precious metals and other financial instruments.
London exchange
Is it possible to start earning on stock exchanges with little or no investment? Absolutely without money, of course, it will not work. But at least a couple of hundred dollars in your pocket is already a good help for the first investment.
“You don't have to start with big investments. Take small steps throughout life and they will lead you to success. Start investing at least $ 10 per month, and in a year you will be able to invest $ 50 per month. It will be much more efficient than waiting years for a large amount of cash to accumulate!”
This advice is given to novice investors Andrea Travigliani- financial expert specializing in the basics of money management and microinvesting. According to her, it does not matter where to start trading on the stock exchange, the main thing is to be persistent and consistent. And given that all the methods promoted by this purposeful woman were personally tested by her during the transformation from a modest accountant to a successful businesswoman, there is no reason not to trust them.
If it seems to you that $50 is unrealistically small, then for example, Gazprom shares are worth within $2, Coca-Cola shares are within $45, in addition to such well-known companies, there are thousands more less expensive shares well-known companies in the world.
For most people, trading on stock exchanges can seem confusing and complicated. But not everything is as scary as it seems at first glance. Experienced "gurus" of the financial roar willingly share their experience with beginners, and if you take their advice not as another common truth, but as valuable advice, it will really work.
You always need to know what you are investing in. The famous investor followed this strategy all his life and, most likely, it was she who helped him make billions of dollars. If you do not understand yourself, you should not blindly trust the hired assistants - their incompetence can also be very expensive.
Diversifying funds is always a good idea.
This golden rule was steadily followed by another luminary of exchange trading Michael Steinhardt. With $10,000 in his pocket, he successfully divided them into 100 $100 deposits and invested them in projects he liked. A couple of years later, his capital was already equal to $ 200,000. This strategy helped him in the future, when he had to pay huge fines in one trial. Near-zero, he again invested his remaining funds in stocks of various companies and quickly returned to the big leagues, having made $500 million.
Discipline is the basis of success. It is this rule that he considers his main secret of success, who made $ 72.5 billion on the stock exchanges. In his opinion, the ability to firmly follow the intended goal and resist the temptation of rash risks is the main quality of a successful investor.
Spending less than earning. “An experienced investor always knows exactly how much and where he earns per month in order to spend less. Whims, the influence of advertising and habits, or pressure from others should not prevent you from clearly following the investment plan and increasing your portfolio of deposits..
This advice is given to beginners who are just starting their business from scratch, Kevin Gallegos- Former US National Treasurer and current Vice President Freedom Financial Network.
The easiest option for a novice domestic investor is brokers or. The main advantage of working with them is that they are registered not in Russia, but in European Union, which makes it possible to invest money through international exchanges, legally bypassing possible legislative obstacles. It is also important that both sites and working tools are completely Russified. For example, licensed by the Russian regulator CROFR.
Brokers allow you to enter such exchanges as NASDAQ, NYSE, XETRA, MOEX, GLOBEX And EUREX(futures), Euronext, LSE, TSE, Singapore, Mexico, Thailand and other world platforms. Minimum amount to open an account $200.
How to start trading on the stock exchange on the Internet? The whole process is divided into several stages:
- Stage 1 - create an account. The registration process is completely remote. You just need to go to the site, create an account and provide contact information.
- Stage 2 - open a trading account. To do this, click on the appropriate button in the cabinet and select the type of trading account (Single Account, Forex, and so on). The trading account is linked to a mobile phone number.
- Stage 3 - install trading platform . A program that allows the user to track changes in the value of securities, make deals and analyze the situation on the market online. The program works with all exchanges supported by the broker.
- Stage 4 - replenish the account. It can be done by anyone convenient way. The system supports replenishment using bank transfer, bank cards, as well as all popular payment services.
- Stage 5 - closing deals. Buying shares is very simple - you just need to find suitable shares, specify the number of shares and click the " Buy". All commissions are included in the transaction amount.
One of the most noticeable advantages and - work with a large number of trading exchanges from around the world. Therefore, from a single account, you can work with commodity markets, securities, stocks, futures, currencies and other financial instruments.
How to start trading on the stock exchange without a broker?
It is impossible to enter the stock market directly. simple by law individuals, which are not accredited by the clearing house and do not have special licenses, cannot directly trade on the Russian stock exchange, the same applies to most other countries, which means that you will need to find a broker. Talk about how to starttrading on the exchange without a broker does not make much sense, since for this you will have to become an accredited exchange participant yourself, and this is a long and expensive process, besides, trading without leverage will require huge amounts of $ 10 million or more, which is available only qualified investors.
Investment Strategies
Honest investment
- Long term investor. Money is invested in shares of promising companies for at least one year. Such an investor needs to rely on fundamental analysis, as well as take into account the pace of change in the economy as a whole and depending on local characteristics. The forecasting basis is weekly and monthly charts.
- Medium term investor. Shares are purchased for a maximum period of one year. The main analysis tool - daily and weekly charts; technical and fundamental analysis.
- Short term investor. Papers are held for a maximum of several weeks. The main analysis tool is hourly and daily intervals.
Speculation
A speculator differs from an investor in that he holds shares for a minimum amount of time, focusing mainly on price movements. The main analytics tool is technical analysis.
- scalper. Uses the difference between the sell and buy prices. Buying shares at the ask price, he immediately resells them at the offer price.
- swing trader. It can hold open positions for a maximum of several days. In this case, profit is derived from market fluctuations. The main analytics tool is five-minute and hourly charts, and the main subject of trading is liquid securities that can be quickly converted into real money.
- day trader. This type of investor only trades within one business day. It captures price fluctuations within minutes and prefers securities with high liquidity and price volatility. The main advantage of intraday trading ( intraday) lies in the fact that in the short period of time in which the day trader works, the external background does not have time to have a negative impact on the open position.
What participant in the stock market to be - it is up to the investor to decide. But it is better to gain experience first, and only then move on to more risky business. To start working on the exchange, you need to follow the instructions:
- Find a reliable broker;
- Choose a trading platform;
- Top up your account;
- Start shopping.
Today, on the Internet, everyone can invest in their future on all the largest stock exchanges in the world.
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The stock market today is an essential part of the financial industry, where trillions of dollars worth of assets are traded. The capitalization of all stock markets in the world today is comparable to the GDP of the whole world, and even exceeds it. This industry employs millions of people.
But what is the stock market from the inside. What are the institutions and mechanisms that are responsible for the security and smooth operation of this huge monetary mechanism.
In this article, we will analyze the structure of the Russian stock market, its main players, their functions and what they give primarily to a private investor.
First of all, it must be said that the stock market and the securities market are not quite the same thing. classically under securities market understand any relationship between various market participants related to the circulation, issue, and withdrawal from circulation of various securities. The securities market, therefore, covers all types of transactions both in the exchange and in the over-the-counter sector. In turn, the stock market is a part of the national securities market, functioning in a structured and organized form in the form of a stock exchange.
Strictly speaking, stock market is an organized securities market, all participants of which work according to established rules.
Scheme of the stock market:
There are 5 types of participants in the stock market:
Market participants issuing securities. They are also called issuers. These are, for example, enterprises issuing shares and bonds, as well as the state and subjects of the federation issuing bonds.
Market participants organizing the circulation of securities. This exchange where securities are bought and sold by private and institutional investors and traders, and depositaries And clearing companies responsible for the control of settlements and accounting of purchase and sale transactions.
The next group is the participants who organize access to the financial assets of the exchange for a wide range of traders and investors. This brokers management companies, and dealers. These companies have the right to conduct transactions on the exchange both on their own behalf and on behalf of their clients, thus providing access to exchange market to everyone.
Perhaps the most important group, for the sake of which the entire infrastructure was created, is the private and institutional investors And traders. Those who acquire securities both for the purpose of holding and for the purpose of resale.
A separate group deserves the main regulator, which establishes rules for all participants, constantly monitors the activities of participants and strictly punishes violations of the rules - this Central Bank Russian Federations(TSB RF).
How the exchange works
So, the basis of the stock market is precisely the stock exchange, on which transactions are carried out only with stock assets and instruments registered (quoted) on it. The range of such financial values is currently expanding significantly. They already include not only the securities themselves, but also currencies, and precious metals, contracts, loan agreements, as well as various hybrid instruments created on the basis of other securities, currencies and contracts (for example, futures and options).
First in modern Russia in May 1990, the Moscow Commodity Exchange was established. In 1991, more than a hundred exchanges were already operating in Russia, which is about half of the exchanges existing at that time in the world. In 1992, the main stock exchange platform MICEX was created, and in July 1995, the modern RTS market appeared. In 2010, these exchanges announced a merger, and already in December 2011, on their basis, the largest integrated exchange structure in Russia was created, renamed the Moscow Exchange.
Today, the stock exchange and other institutional participants in the organized securities market in Russia form a system with a very high degree of regulation, transparency and orderliness of operations. Which, first of all, is aimed at protecting the interests of investors.
Stock Exchange is an organization that provides a platform and infrastructure for organized trading in securities and other financial assets. In the 21st century, the exchange is, first of all, a high-tech company, the basis of which is servers, high-speed and secure equipment, and the latest software. Since the main task of the exchange is to connect hundreds of thousands and millions of buyers and sellers of financial assets via the Internet and provide them with the opportunity to conclude transactions with each other. Millions of transactions are made daily on the Moscow Exchange. The strategic task of the exchange is to maintain market liquidity. A liquid market implies a high frequency of transactions, significant trade turnover, which leads to smooth price movements and low spreads (the difference between the buying and selling price at the same time). Low liquidity of the market, on the contrary, leads to tension among the participants of the exchange, fear that there will be no one to sell the asset and the emergence of negative expectations and panic among participants in exchange trading.
That is why the activity of the exchange is strictly regulated. At the same time, the owners of the exchange do not have the right to extract and receive any income from the purchase and sale of financial assets on the exchange. This ensures the impartiality of the exchange regarding the prices of the assets themselves. At the same time, the exchange earns on commissions, and if the exchange has high liquidity and many bidders, the exchange will be a fairly profitable organization (for example, the New York stock Exchange, Moscow Exchange, etc.).
Only special, accredited participants - brokers, dealers, management companies that have the appropriate licenses - have the right to trade on the stock exchange. In turn, private and institutional investors and traders who wish to trade on the stock exchange participate in stock trading indirectly through these accredited organizations acting as intermediaries. To do this, it is enough to open an account in this organization.
Currently, there are several stock exchanges operating in Russia. However, the real main volume of trading in stock values is actually concentrated on two exchanges:
OJSC Moscow Exchange.
This exchange was formed in 2012 through the merger of the MICEX and RTS exchanges. It is currently the largest stock exchange in Russia and the CIS. Quotes of this exchange are backbone and are used, for example, to establish the official exchange rate Central Bank. The Moscow Exchange has several trading sections, within which traditional securities such as stocks and bonds are traded, as well as derivative financial instruments such as futures, options, there is a currency section and even drag. metals. The financial group of the exchange also includes the central depository (NCO JSC "National Settlement Depository") and the clearing center (Bank "National Clearing Center").
JSC "Saint-Petersburg Stock Exchange".
In November 2014, trading in foreign securities began on the St. Petersburg Stock Exchange. Now more than 180 shares of the world's leading companies, such as Apple, Facebook, Visa, and others, are admitted to trading. Plans to make available to Russian investors all US stocks from the S&P-500 index. These are the 500 most liquid and interesting stocks on the US market. Essentially this great way diversifying your investment portfolio across countries and currencies without actually opening a foreign brokerage account. We wrote in more detail about the St. Petersburg Stock Exchange in the article "".
How to get on the stock exchange
Management companies that manage clients' capital at their own discretion and, if they make a profit, share it with clients, can also be accredited participants in the stock market.
For an ordinary investor or trader, both physical and legal entity the services of a broker or management company will be much more accessible. By concluding a contract for brokerage services, the investor for a commission (percentage of the transaction) gets the opportunity to carry out trading operations on the stock exchange from his brokerage account for a certain time. In case of management company- the client transfers funds for management to professional market participants, expecting income after a certain period, while he himself does not participate in the selection and evaluation of securities. In the article "" we described the advantages and disadvantages of each of these methods.
It is important: It should be noted that the activities of brokers are organized in such a way that client accounts and brokers' own funds are strictly separated, in fact, brokers do not have the right to access client accounts. In contrast, for example, from banks, where the client simply gives the amount of funds, and the bank disposes of them at its discretion, lends, etc. Further, when we talk about depositories, we will see another mechanism for protecting clients' brokerage accounts.
IN modern conditions development electronic technology stock trading is becoming more and more accessible to the rank and file, not professional participants stock market. And not only brokers are appearing, but also sub-intermediaries, such as, for example, Tinkoff Bank, which, on the one hand, charge higher commissions for transactions, and on the other hand, allow you to make transactions through your phone in just one click.
An example of a technical solution for private investors in personal account Bank Tinkoff:
We have already described the role and functions of all key participants in the stock market. Consider now the auxiliary participants who are involved in the control and maintenance of the infrastructure of the stock market. The institutional infrastructure of the stock market, which ensures its functioning, but is not directly involved in exchange trading, includes depositories, clearing organizations, financial institutions and a market regulator (in Russia this is Central bank, which has been a macro regulator in financial markets since 2014).
Control of exchange operations
The main task depository activities is the accounting and registration of the transfer of rights of holders of securities, as well as the storage of information records about the holders of securities. The depositary confirms and protects the rights of securities holders from illegal actions of the issuer or broker. Depositories operate on the basis of a license and their activities are also controlled by the Central Bank of the Russian Federation. Depositories assist in exercising the rights of securities holders, for example, when receiving dividends, exercising the rights to manage a company through participation in general meeting shareholders, etc. To this end, the depository can provide related services: maintaining clients' cash accounts, representing the interests of a shareholder at the general annual meeting, monitoring the issuer's activities, market analysis, tax and investment consulting, etc.
It is important: From an investor's point of view, depositories perform a very important protective function. Since all securities records are kept in the depository, this makes the client independent of the broker. Closing his brokerage account with a particular company, the client continues to be the owner of the securities. It is also a kind of insurance in case the broker is closed for various reasons. We can simply go to another broker to open an account and continue to trade in our securities.
At the same time, the storage of information records about the owners of securities in the depository does not mean the transfer of ownership of the client's securities to the depository.
clearing organization deals with the definition of mutual obligations of participants in exchange trading. The clearing organization also operates on the basis of a license. In fact, the clearing house of the exchange monitors all transactions, fixes the initial and final sellers for transactions. Next, the clearing house must determine how much brokers and dealers should pay each other at the end of the exchange session.
Today, the most important regulator in the stock market is the Central Bank. But it was not always so. The first regulator of the Russian stock market was the Federal Commission for the Securities Market, established in 1993. Further, in 2004, its powers were transferred to the Federal Service for financial markets(FFMS). And since 2014, the functions of the securities market regulator have been concentrated in central bank RF. Within the Central Bank of the Russian Federation, the stock market is handled by the securities market department and commodity market who has been given all the powers Federal Service on financial markets in the field of licensing professional stock market participants, regulation, control and supervision of their activities.
Therefore, for private investors, the main guarantee that they are dealing with an accredited broker or management company is the availability of appropriate licenses issued by the Federal Financial Markets Service or the Central Bank of Russia. It is worth noting that most Russian brokers, for example, in the forex market, do not have any licenses for their activities. Which speaks of the complex legal status and sometimes even the illegitimate activities of such companies. In turn, the activities of stock market brokers are more transparent. On the exchange website, you can see lists of such licensed brokers, as well as their various ratings, and make sure that the company you plan to work with is reliable.
Summarize
The stock market is one of the most attractive objects for investing free cash. In spite of financial risks, this market provides an investor or trader with the prospect of receiving high yield and relatively guaranteed liquidity of their investments. In Russia, the stock market is quite young and greatly underestimated. That is why it is quite dynamic and is of interest not only for domestic, but also for foreign investors. In order to understand how to take your first steps in investing in the stock market, we invite you to our free master classes, where we tell you how to minimize risks, find protected investment assets and at the same time achieve stable and decent returns -.
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