The stock market may seem like an exercise in chaos. However, it is a very efficient process that facilitates the buying and selling of securities. Thanks to vast computer networks, much of the trading is done with little, if any, human intervention. It makes it as easy to sell 100 shares as it is to sell 10,000 shares. Read on for a primer on making a living by trading in the stock market.
The Basics
Trading stocks: You hear that phrase all the time, although it is wrongā€”you don’t trade stocks like baseball cards (I’ll trade you 100 IBMs for 100 Intels). To “trade” means to buy and sell in the jargon of the financial markets. How a system that can accommodate one billion shares trading in a single day works is a mystery to most people. No doubt, our financial markets are marvels of technological efficiency.
Investing is much more than a numbers game, but you can’t get very far from numbers if want to understand what’s going on in the market or with your stock. The stock market quote, which you can find in the daily newspaper or online, is the most basic collection of numbers that providers update on a regular basis.
When it comes to buying and selling shares of stock, the exchanges act more like flea markets than centers of financial sophistication. That’s why you need to understand the bid and ask prices. Unlike most things you buy, both the buyer and seller set stock prices. The buyer states what price they will pay for the stockā€”this is the bid price. The seller also has a priceā€”the asking price.
Stock Prices
Stock prices, and why they rise and fall as they do, may seem like another mystery. You will hear about the influence of earnings on stock prices or the economy

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