Stock Market Investing Strategy

Investing Strategy

Stock market investing has its own specialized vocabulary but once you have the basics under your belt you can understand better how the market works. As with any investment, the more knowledge you have about stock trading the more successful you are likely to be.Stock market investing is done through a broker – an intermediary who takes orders and executes them. <br>Brokers also offer advice on stock market investing strategy - about which stocks to trade and the condition of the market. These 'full-service' brokers charge a relatively high commission. Investing in the stock market can also be done through discount brokers who charge significantly less. You don't get advice, but to some, that is an advantage.<br>Common stock market investing services commonly offered by brokers include online trading, broker assisted trading, stock market investing advice etc. Some brokers also offer options like Interactive Voice Response System for placing orders by telephone and wireless trading systems for making orders by using web-enabled cellular phones or other hand held devices.<br>Stock market investing is done through brokers by placing different types of buying and selling orders. A market order is an instruction to buy or sell at the current market price. The order is usually executed very near the price you are quoted at the time of your order. However, if the stock price is fluctuating or is not actively traded there may be a difference between the quote and the actual transaction.<br>A stop order helps to limit losses or protect profits. They become effective when the market hits the stop price but may trade above or below the stop price because they are traded at market price after they become active. Limit orders may not be placed at all even if the market reaches the limit price. If the market moves quickly there may not be time to execute your order before the price falls out of the limit price range.<br>Stocks are usually traded in 'round lots' – lots of multiples of 100. It is possible to trade other amounts of stocks, but this kind of trade is called an 'odd lot'. Trading software can handle both types of orders, but odd lot orders are slightly more difficult to fill than round lot orders.

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