For a newcomer to the trading industry, the process of trading stocks may appear quite an adventure. It appears extremely difficult to immerse yourself in the unknown world and adjust to the existing system without proper knowledge. This sphere has its own peculiarities and may prove to be highly profitable. To get a deeper understanding, every trader has the main questions to explore: how to start forex trading and how to correctly calculate while trading. For this reason, every trader should know some basic information.
Process of Stock Trading in Detail
Trading stocks takes place when you perform selling or buying of shares of a company to gain profit. After buying shares of a certain company, you can position yourself as an owner of a definite part of this company. As a result, the profit from your investment will increase or decline with the varying price of a company. To stay informed, currency analysis from Robomarkets enables you to determine the most appropriate time to perform operations with a currency pair.
The only person who can dispose of the acquired shares is you. You may sell them at any time you want or need them. Remember that there are no rules, and every share can be winning or losing; so, it is necessary to correctly determine gains and losses. To facilitate the task, there is a pip value trading calculator.
How to Correctly Calculate During Trading Stocks?
Not always the possibility of making good money equals the level of risk you have to face. Negative balance protection will help you to stay rational and avoid unwise actions. In addition, being stuck to one trading strategy, it is crucial to monitor the net profit or loss you gain from your actions on the market. To do this, you are to perform the following operation: calculate the difference between the amount of money you spend on stock buying and what you receive after their selling. The difference is usually counted in percentage.
Let`s imagine that as a dedicated trader, you buy 10 shares of a certain company, paying $10 per each. Therefore, you invest $100 in total. When selling, you raise the price to $15 each and get $150. As a result, $50 is your profit from this operation. The seemingly logical scheme can vary depending on the size of the investment, requiring introducing a lower selling price. To avoid misunderstanding, the return calculation is needed. Your profit on every share is $5, and the return is 50% ($5 profit and $10 loss).
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