HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

Why trade shares?


Why trade shares, continue to read and learn more. Trading shares involves buying and selling company shares listed on a stock exchange. Traders choose to trade shares as a way to potentially profit from price movements. In stock trading, a trader will buy a share at a low price and then sell it at a higher price in order to take advantage of the price difference. On the other hand, a stock investor will buy and hold a share for a longer period of time.

Trading real shares or share CFDs?

When buying or selling shares, traders can do so by actually buying the share or, alternatively, trading derivatives of the underlying asset. Such a derivative is a CFD or Contracts For Difference which allows traders to speculate on the price change of a share without owning it. In this article, we look at what trading shares involve, the advantages of shares trading and how to start trading shares with CFDs.

What are shares trading?

So, have you heard about stocks? Basically, they give you a slice of ownership in a company that’s listed on a stock exchange. When a company wants to raise more money than what it can get from its private investors or banks, they usually decide to ‘go public’ and list its stock on the exchange. That way, people like you and me can buy shares and become part-owners of the company.

So, when a company wants to sell its shares on a stock exchange, it usually does so through an initial public offering (IPO) on the primary market.

This takes the company from being solely owned by private investors to having a mix of private and public shareholders. Once the shares start trading on the secondary market, which is basically a stock exchange, the price of the shares goes up and down based on what investors think the stock is worth. So, throughout the trading day, the value of the stock can change quite a bit.

What influences the price of shares?

So, you know how stock prices can change a lot during the day or over a longer period of time? Well, there are a lot of different things that can cause those changes. Some of them have to do with the company itself, like how much money it’s making or how profitable it is. But there are also external factors that can play a role, like the overall state of the economy or any major political issues that might be happening. All of these things can affect how investors view the stock and, in turn, impact its price.

CFD trading

So, Contracts for Difference (CFDs) can help traders make bigger trades and speculate on how a company’s stock price will move, without actually owning the stock. They do this by using a margin. However, it’s important to remember that CFDs can be risky because they’re leveraged, which means that both profits and losses can be a lot bigger. But, even buying shares without leverage can also be risky, so it’s good to always be aware of the risks involved.

How to trade share CFDs

If you’re interested in trading stocks using CFDs, it basically involves a broker agreeing to pay you the difference between the opening and closing price of a security. You can either take a long position, where you’re speculating that the price will rise, or a short position, where you’re speculating that the price will fall. To get started, you can create an account with a CFD provider like T4Trade. You don’t need a separate stock trading account, you can trade share CFDs alongside other CFDs on commodities, indices and forex, all in one trading account.

Why trade share CFDs with T4Trade?

T4Trade offers margin trading so traders can trade share CFDs with limited funds in their accounts. It’s important to note that CFDs are leveraged products, which means that gains and losses can be amplified. When trading share CFDs, the trader is only speculating on whether the stock price will rise or fall, and can take a short or long position based on their trading objectives. While CFD trading shares similarities with traditional trading strategies, it tends to be shorter-term in nature due to overnight charges.

T4Trade offers an extensive educational library with useful resources to help you trade shares. Sign up with T4Trade and use our mobile or web trading apps or download MT4 and trade CFDs easily and safely.

#source


RELATED

IronFX:Trading and Investing in Gold

Gold is one of the widely traded commodities worldwide, and the most popular precious metal. The price of gold can fluctuate depending on political...

Money Management

Although you may think the title of Money Management is pretty clear and easy to implement – how to manage your money and invest wisely, it is slightly more than that...

Cryptocurrency Trading for Beginners: Best Strategies and Patterns

Today, there are almost 19 thousand cryptocurrencies in the world. On the one hand, this is a huge opportunity! For comparison, only a few thousand companies...

Understanding Market Stress: Navigating Economic Turbulence

Market stress is a term that has been increasingly prevalent in financial dialogues, reflecting moments of significant tension and disruption in market functionality...

Important Factors in Trading Forex

Whether you are already investing in the Forex markets with Olymp Trade or you're looking to start, there are many things to consider and understand in order to find more...

The Ultimate Guide To Stock Investing For Complete Beginners

There`s hardly a single person today who has heard about the passive income that investing can consistently bring in. There are many examples: from the great financiers...

Grasping the Concept Of Hedging in Forex Trading

Hedging is a financial trading technique that investors should be aware of and employ because of its benefits. It protects an individual’s funds from being exposed to a problematic situation...

What is revenge trading?

Revenge trading has been identified as one of the major causes of traders' failure. In fact, Brett Steenbarger, a well-known trader and trading coach...

What is the financial market?

By definition, the term financial market refers to any marketplace where financial products are traded. These include the stock market, bond market, foreign exchange market...

How to Trade Precious Metals

Stocks grow due to increases in companies’ profits. Crypto is mainly due to a change in the supply-demand balance. Currencies move as countries solve some issues and create others...

How do Forex trading algorithms work?

Up until the 1970's foreign currency trading was conducted over the phone by primarily institutional investors. In what was a relatively closed market there was very...

CFD trading: Pros vs Newbies

It seems like everyone is opening a trading account, installing mobile apps and desktop trading platforms, and adding online trading CFDs to their financial activities...

Intraday Trading: The Complete Guide

The advent of online trading available to anyone with a smartphone or tablet has opened up financial markets like never before. Modern technology, 24-hour news, and minimum...

First steps of a trader. Where to start your Forex journey?

Welcome to the world of trading! You probably want to become more active in managing your finance and are now in doubts where to start. This article will guide...

Risk Management on Forex: Basic Rules

Senior traders would say that there is no chance to build a successful career without risk management. Whatever your trade duration is, the trade should...

Is it Easy to Learn Forex? A Comprehensive Guide to Mastering Forex Trading

Forex trading is a popular and potentially lucrative way to earn both active and passive income. However, it's essential to understand that learning forex is an ongoing process that doesn't depend on whether...

Scalping: When Seconds Count

Today we will be talking about scalping as a trading approach. Scalping is characterized by very short-term trades with minor price changes and a profit of several ticks...

The Criticality of Stop Orders in Trading: An In-Depth Guide

The vast universe of financial markets demands a keen understanding of its intricacies. For traders and investors alike, navigating this complex ecosystem is pivotal...

How Does Christmas Affect the Stock Market?

It’s this time of the year where businesses and individuals begin to power down and ready themselves for the arrival of Santa and his reindeer. However, many traders continue...

Best Online Forex Trading Tips for Beginners

As a forex trader you must have come across lots of information about trading forex. One of the biggest challenges is finding the right information for you...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.