As soon as an investor or a beginner trader thinks about what to do with his savings, he inevitably faces the question: “Where to start? In fact, it is not profitable to put money under ridiculous interest in the bank. You won’t get that interest later, either. If we also take into account the very real prospect of losing the entire amount in the same bank, the benefit of such an order of money becomes quite obvious. Trading on the exchange can be a profitable alternative, but is it worth making such a decision?
Trading on the stock exchange for beginners
The simplicity of the question was touching, but it didn’t make it any easier. It is not worth replicating here all the way that many traders have had to go before they understand what to do when there is an intention to trade in stock markets. In this article we will talk about where to start and until such time as such useful tools as the twelvedata API and others are affected. So, the first question that should be solved looks quite simple.
It sounds like this: “In what markets will I trade?”. But this question seems simple only at first sight. In fact, it is a danger, because if you do not pay proper attention to it, you can quite realistically find yourself in a dead end. The fact is that every market has its own peculiarities. At the same time, they inevitably give rise to certain “pros” and “cons”, which, in turn, for each individual weigh more or less – depending on his personal preferences.
To make it easier to deal with this issue, we will try to consider all its components in order. This will bring thoughts into the system. First of all, it is necessary to find out the geographic location of trade. In other words, on what market on the territorial basis are trading operations most likely to be conducted? The main markets are the USA and Europe.
Some traders, however, may turn to other markets, such as Australia, India, Asia, etc. – But still, it is more exotic. In each case, the procedure is almost the same: you have to choose a brokerage firm, open an account, and then you can trade, not forgetting, of course, to transfer money in time. But to do this is not in the first place, but at least only after you read this article.
The second problem is related to the first one and may require you to reconsider the decision already made earlier. The problem is to find out what to trade. This question is not an idle one. The Bloomberg news agency reported in early 2000 that it was broadcasting market data on approximately 2.5 million financial products. It would take exactly one month of uninterrupted work to view all this data, spending only one second for each product. It is unlikely that anyone would want to experience such a pleasure.
The real solution to this problem is to turn to the so-called “market segmentation”. In simple words, each type of financial instruments belongs to a certain segment. There is a property market (equity). Here the most active is the market of corporate shares (stock). There is also a bond market, which is usually subdivided into the market of corporate bonds and government debt securities.
Also, the most famous is the market of commodity futures, where operations on futures are made not only on commodities, but also on currency and indices. And finally, it is necessary to name the market of currency exchange operations in cash – Forex market. There are other smaller ones, but in this case it is not so important. Real time stock market data will give you the opportunity to get actual information about each asset you are interested in.
How to understand all this and what to give preference to? Usually it is a personal matter of everyone, so it is very difficult to advise here. As a rule, investors and traders who are worried about their capital give preference to the stock and futures market. If you are interested in a higher level of volatility, you can consider the cryptocurrency.