Strategies that professionals use to measure their stock profit

strategies that professionals use to measure their stock profit

It's all about points

To measure how much you earn or lose in the stock market, Wall Street uses the term points to denote dollars. First, remember that we talked about stocks which are part of the company. You can buy one share, 100 shares, 1000 shares, or as much as you can. Each share has its price, starting from several pence to hundreds or even thousands of dollars. And these prices are constantly changing.

Now, let's go over how to score results. For example, the transfer that you bought a group of shares in a company that sells the stock for 20 dollars. If your stock price increases from 20 dollars per share to 25 dollars per share, then your shares increased by 5 points, and that is another way of saying $ 5 per share. And that's how we record results on Wall Street.

Another example. If your shares go from 10 dollars per share to 11 dollars per share, you have made one dollar (or one dollar per share you own).

 

The same type of registration takes place in basic indicators like Dow, Nasdaq, S&P. 500 If the Dow rises from 15k to 15k and 100, you will say that the market has increased by 100 points.

 

Note: Although it is okay to tell others the number of points you have achieved or the percentage of your earnings, it is not appropriate to tell others the exact amount you have earned in the market. Even if you earn $ 5,000 in one day, it is best to keep it a secret (I am not an expert in codes of conduct, so I seek the help of your ability to judge matters).


 

How much does it cost?

If you can understand the following calculation, you will understand how to buy and sell stocks. As with auction, every trade takes place at a certain price. This price is constantly changing - some shares change their price several times per second, so let's say that the shares of a company you are interested in - SSCI Industrial Company - are currently offered for trading at 20 dollars per share.

You decide to buy 100 shares, and this matter works out the following way 100 shares multiplied by 20 dollars per share so the cost is 2000 dollars. This means that you must pay 2000 dollars to your brokerage firm if you want to buy a hundred shares in SSYC. You will also have to pay approximately $ 10 or less as commission for each trade.

 

Learning the calculation is easy, but to be sure that you understand the matter, here is another example. Let's say that you want to buy 1000 company shares to sell the shares at 15 shares, how much is the cost? The answer is 15,000. Another example: Let's say you want a share at a cost of $ 5 per share. This costs $ 500 in addition to a commission to purchase those shares.

Note: Typically, the prices of most shares bought by individual investors range from $ 5 to $ 50 per share, but this varies depending on the individual.

 

How much have you earned?

Say you bought 100 shares at a cost of $ 15 per share. You already know that this will cost you 15 thousand and 50 dollars. If the stock goes up to $ 11, you will earn a point. If the stock goes up to 17 $, you have achieved two points.

Here is the important part: If you have 100 shares and make 1 point, you have made $ 100 profit. And if the stock went up by two points, it would have made a profit of $ 1. Thus, the more shares you own, the greater the amount of money you earn (or lose if stocks decrease).

 

What happens if no one wants to buy my shares?

This is really a valid question. This is like setting up an auction to sell a house that no one has attended. In order to solve this problem, the exchanges established a system to ensure the presence of a market maker or specialist. In other words, there is always someone responsible for keeping the market fair and orderly. When there are no buyers, that person intervenes to buy. And when there are no sellers, that person intervenes to sell. You may not get the best price, but at least you know that someone is willing to buy or sell your stock.

 

Specialists

On the New York Stock Exchange, the specialist acts as a broker for each stock. Specialists "create a market for everyone or several different stocks. There are enough specialists to cover all the shares listed on the stock exchange. This means that professionals track transactions and collect buyers and sellers of water. Sometimes professionals use their own money if someone else does not want to buy or sell stocks. Does this job look fun? Computers and mobile devices do most of the work now. Before computers, specialists filled out requests manually, each order separately. When orders increased from hundreds to billions of shares, computers were used to handle orders.


You may be wondering how a specialist gets his salary since he often uses his own money to fulfill requests. First, no one pays a salary to market makers, they run a business that relies on their individual profits and losses. They perform unwanted trades to maintain order in the market, but they have the right to buy and sell to manage the risks to which they are exposed. Specialists also make money by maintaining the market, and this compensates them for the risk they take when they use their own money to buy or sell.

If you are only going to buy a few hundred or even a few thousand, do not occupy your time with great concern over whether the professionals are achieving the success they do not care about your order, regardless of the number of shares you are trading.

 

Unlike the New York Stock Exchange system that requires only one specialist to be assigned to the company’s stock, NASDAQ can have multiple market makers for one share, the more popular the stock, the more market makers are assigned to it.

For example, a stock like IBM may have up to a market maker, while a $ 1 share with a low trading volume may only have one market maker. But there is at least one market maker dedicated to each Nasdaq share. Keep in mind that all this happens behind the scenes within seconds. Because billions of shares are traded daily, your orders are routed through computers, but it's always a good idea to know that someone is willing to buy or sell your shares. You can start buying and selling stocks in simple amounts and with a reliable company.

 

Unlike the New York Stock Exchange system that requires only one specialist to be assigned to the company’s stock, NASDAQ can have multiple market makers for one share, the more popular the stock, the more market makers are assigned to it.

For example, a stock like IBM may have up to a market maker, while a $ 1 share with a low trading volume may only have one market maker. But there is at least one market maker dedicated to each Nasdaq share. Keep in mind that all this happens behind the scenes within seconds. Because billions of shares are traded daily, your orders are routed through computers, but it's always a good idea to know that someone is willing to buy or sell your shares. You can start buying and selling stocks in simple amounts and with a reliable company.

 

Why do investors lose their money in the stock market:

There are many reasons for the investor to lose a lot of money in the stock market and the stock market, so you should know it in order to avoid it and earn profits in the money market such as not following the market and news and not consulting experts in the money market and not following them and following up what they invest in and for this article is a first part you can refer to from here why it is lost Investors have money.

Trading during the first 15 minutes of the trading day

Are there certain times of the day when trading is difficult based on my observations, the most volatile time to submit a trade is the first 15 minutes of the trading day (this is also the reason why you should not place orders after the closing. This time is not always volatile, but it is Also some days).

During the market opening, automatic market orders and trading transactions are driven by panic, and while the market tries to find its way during this volatile period, some technical indicators provide fault signals (especially late indicators).

In addition, in the last 15 minutes, many speculators close their positions. Since this period may be very volatile and mysterious, junior speculators may be worth avoiding it.

 


Note: when you gain experience, this period may also become profitable. Because the turnover is usually high and it is easy to execute orders.


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