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12/01/2022

Understanding the stock market

Understanding the stock market : it’s easier than you think

The stock market, where transactions on securities or goods are carried out, can seem mysterious to many people. However, the stock market is based on the simple rule of supply and demand.

What are stocks ?

Stocks are a transferable and negotiable fraction of the capital of a company. When a stock is in high demand, its value rises due to the abundance of potential buyers. When a stock falls, it means that there are more sellers than buyers. Stocks and the stock market allow a company to finance its activities through the sale of its capital in the form of these negotiable securities. The stock market thus plays a capital role in the real economy. Moreover, becoming a shareholder of a company enables you to :

  • receive dividends if applicable
  • take part in the general meetings

Many opportunities to invest

There is no lack of opportunities when you want to start investing in the stock market, as long as you look for the right type of asset for your profile : shares, commodities, indexes such as the CAC 40 and the DAX 30, or even currencies (euro-dollar or euro-Swiss franc). In addition to these possibilities, there are derivatives such as CFDs, futures and options. The latter are more popular with individuals, who generally place their money in the stock market with the aim of building up capital by making their savings grow. This is usually a long-term strategy.

The advantages of online trading

Since it is possible to access the stock market on the Internet, short-term profits are also attracting stock trading enthusiasts. Like institutional investors, a trader who trades for his own account can access several markets. Stock prices fluctuate on a daily basis, in real time. If we observe these fluctuations over a given period of time (a few months or a few years), we can see the volatility of the asset concerned, i.e. the changing nature of its value. In all cases, whether they are large market players or simple individuals, buyers hope to resell at a higher price and sellers anticipate a probable decline in their shares.

How to get started on the stock market

This market is risky and there is no such thing as a winning formula. However, it is relatively common to make gains during favorable phases. There is a simple way to test your skills as an amateur trader. All you have to do is choose an online broker that is suitable for beginners, such as arya-trading. You will be able to practice with a simulator that reproduces the stock market prices in real time, to access training on online trading, to understand the stock market and to understand the Arya algorithm, which will help you make the right decisions. This will help you master trading faster.

Opening an online trading account offers you the advantage of a bonus payment for creating a current account. The financial risk is minimized by a system that limits your losses and secures your gains. Having your own online trading account provides a trading order, or personal mandate to buy or sell the securities of your choice.

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