I know when I used to think of the stock market it was all suits and complicated calculations, analysis and stress, and I’m sure for some people it probably still is.
However in recent years it’s come on a long way and become much more accessible to the average person, and if researched it could make you a small fortune without much work or time spent at all ! So here’s what you probably didn’t know about the stock market…
Online stock trading
While the classic stock trading image is of brokers standing around a dusty trading room floor and shouting out “buy!” and “sell!” orders all day long, that’s no longer the case. Thanks to the rise of online trading through platforms such as CMC Markets, most trades are now conducted entirely using computers. In fact, very often the orders themselves are made by computers, as companies compete to develop algorithms that can automatically buy and sell stocks at advantageous times.
Ease of access
Another advantage of online trading is how accessible it’s made the stock market to ordinary people. While your parents or grandparents probably needed to find and call a broker if they wanted to get involved in the stock market and place trades, thanks to online trading now you can do so from your computer, tablet or smartphone anywhere you have an internet connection.
Trade however you like
Trading is way more than just buying a stock at one price and selling it at a higher price. In addition to trading stocks, you can trade commodities like gold and silver, foreign currencies (known as forex), treasuries, indices and more.
You don’t have to buy or sell stocks to make money on them either. Options like spread betting allow you to take advantage of correctly predicting the rise or fall in the value of a stock and make money without ever owning the stock. CFDs, while working differently, offer much the same benefits while also remaining tax efficient, as no stamp duty tax is charged on CFDs in the UK.
For those of you at the cutting edge of technology, companies are racing to develop algorithms that can take in stock market data, analyse it and place trades that it thinks are likely to be profitable. The advantage of algorithms is their ability to churn vastly more data points at a much quicker rate than any human could hope to, but the stock market is notoriously tricky and making accurate predictions is still difficult. There are many startups out there developing tools based on algorithmic trading that you can take advantage of. Some even allow you to build your own rudimentary algorithms and have them place trades for you!
The stock market is a very exciting, dynamic and fast paced environment where money flows freely. Even though it might seem intimidating or too complicated to understand, once you actually do some research into it you’ll probably realise it’s not as hard or as scary as it first seemed. In fact, thanks to all the new tools and resources available online, there has never been an easier or more welcoming time to start trading. It takes some courage and research but once you get your feet wet and you make your first few successful trades, you’ll quickly find how addictive it can become!