Enter the world of trading and meet the buy and hold traders

Enter the world of trading and meet the buy and hold traders

This won’t be an article about short-term trading or any market that focuses on that. This time, we will skip over binary options, binary options robot and other things that help the short-term traders. No, this time, we will talk about long-term trading. When we say long-term, we are talking about people that buy shares and hold them for years. What advantages this kind of trading has and who are the people that do this are the subjects of this blog.

Benefits of this type of the investment

A deal like this is more of an investment than a trade as the trader keeps the stocks for years before they even consider the possibility of a sale. This passive form of the investment focuses on stocks from major companies. A trader of this type will not invest in a new company as its stocks don’t have their true value at that moment.

sell-buyThere are only several trades per year for a buy and hold trader. That means the amount of the commission is very small. But this type of trading also has a positive impact on portfolio management and the risk of compulsive trading. People who enter these long-term deals spend the majority of their time on research and the analysis of the stocks. file_1They don’t rush into the deals as their investments get locked as stocks for a long period in which they gain very little to nothing.

Other parties on the market spend a lot of time on the daily price movements. A party that invests in these deals doesn’t need that info. The stocks they buy will be in their possession for a year or longer, and daily changes in the price mean nothing. Even in the research and analysis phase the info from that kind of price movement observation is insignificant.

Additional benefits of the long-term trading

The owner of the shares gets the opportunity to earn money through dividends. If the shares they bought give them the right then they will gain predetermined payouts that correspond with the growth of the dividends. swing-trading-strategyOther buy shares that provide them with payouts according to the number of shares they hold. The difference between these two income sources is in the extent of rights they provide to the investors.

Some parties, mainly big companies, use the stock market as another way to evade tax. This isn’t anything illegal, as they invest the money as any other actor on the market. With the investment in the stocks, they avoid capital gains taxes. All along the way, their shares generate a small income. If we combine that with the money they save through evasion of those taxes, we can see the real extent of their profit.

contactusThe good thing about this “buy and hold” strategy is that it works. If you perform the research right then, the chances of a loss go to a minimum. You will profit from this trade, the only thing you require is the starting capital and a lot of patience.


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Insight into options trading

Insight into options trading

You have all heard about binary options from numerous adverts. But did you know that there are other forms of options and other markets where traders can use this type of security? Many of you were probably unaware of this due to the low level of marketing they get. But yes, there are other options, and you can find them on different markets, including the stock market. Due to that many traders mix options with stock trading. But these two types of exchanges are different on so many levels.

Trading stocks are rather simple, as you become the owner of the asset you purchase. The asset may be a commodity or a stock aka a small ownership of the company, but in the end, you own something. Options trading is a bit more complicated.

Options trading in a nutshell

thinking-ideas-ssOnce again we have to say that people mix two types of exchanges that involve options. On one hand, we have binary options that give the trader two options for a trade. Trading these is very simple, you either lose your investment, or you earn a fixed profit. The market for this exchange is pretty wild, and it spawned many scammers. chart-1024x768It also led to the creation of a plethora of trading software, but most of those are scams as well. If you are interested in one of those programs, then try http://top10binaryapps.com/. It’s one of few legitimate tools that can enhance the trading experience and boost the return percentage.

“Normal” options give more choices to the traders. Rather than having only two choices, they provide multiple options that a trader can use and combine. A lot of parties, both individual and corporative, use this form of exchange. Some do it for the profit aka risking an investment and the possible loss to earn a return.

Parties that do this are the individuals, or as some call them – speculators. Corporate parties use this exchange for hedging – buying an option to hedge against the possible loss of an investment.

Big corporations, other companies, and even banks use options to reduce the risk of the loss or to reduce the possible losses to more manageable levels.

Strategies and other crucial aspects of the options exchange

The luck plays a small role in trading. There are no old and lucky rich men; there are only those that found an excellent way to make a profit.  Entering a market without a sound strategy will bring you nothing but a depletion of your resources. A good strategy is hard to make, but once you do make one, you generate a constant influx of money.

bu_librarybig_12Options are all about the choices you make, the underlying aspect, and volatility of the market as well as the length of the expiry time of the trade. Finding assets, which you can turn into profit, with different expiry dates is not an easy thing to do. Lengthy research and good data collection are just some of the tasks that a trader needs to finish. This knowledge helps him to decide when in the future will the price of an asset change and in which direction it will go.


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